Talk

fuel economy. supply vs demand side

I read a quote recently that very clearly identified the problem behind the proliferation of gas guzzling monstrosities distributed under the abbreviation S.U.V.

First a background. The U.S. government attempts to regulate and limit the production of high gas consumption vehicles through a mechanism called CAFE (Corporate Average Fuel Economy). The fuel economy rating for a manufacturers fleet of passenger cars must average atleast 27.5 mpg. Failure to meet this results in a fine of $5.00 per 0.1 mpg that it falls behind.

The quote I read said something to the effect:

trying to control gas consumption by forcing manufacturers to adhere to CAFE is like trying to reduce obesity in America by reducing the manufacture of XL shirt sizes.