Flutterby™! : Capital costs & CAFE standards

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Capital costs & CAFE standards

2011-08-24 16:10:34.306043+00 by Dan Lyke 1 comments

I have been thinking recently about the idea that we may actually apply a negative factor when including capital costs in transportation calculations. "I have the resource, I may as well use it". "The portion of the trip that's fixed cost actually goes down the more I use this resource".

Knowledge Problem: Raising MPG standards, part 2: Morris well explains the relative advantages of raising the gasoline tax points out that when we increase CAFE vehicle mileage standards, we're actually pushing more of the cost over on to capital portions, and probably encouraging people to drive more.

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#Comment Re: made: 2011-08-24 16:52:58.450586+00 by: ebradway

CAFE standards have always struck me as an example of Congress attempting to legislate physics. I never thought about comparing CAFE standards with gas taxes. Congress has every right and ability to raise gasoline taxes. The result would be people who need to drive would buy cars with higher MPGs and people who didn't need to drive wouldn't.

It is a loss for the oil industry but not for the auto industry or the environment.