Environmental Protection Agency, Term Paper Example

There is a problem in America and around the world with carbon emissions. It is certainly a worthy goal to try and fix this and as an organization you deserve credit for your attempts to solve this problem. Fuel efficiency standards are one such attempt. A new set of standard necessitate that cars have a combined efficiency, highway plus city, of almost fifty-five miles a gallon by 2025 (Vlasic). While this is certainly a commendable idea and goal that does not mean other options should not be explored. More effective ways to limit carbon emissions and save on oil consumption do exist and should hopefully be explored and recommended by your organization.

To first examine these proposals, one must begin by identify their goals. In the case of fuel efficiency standards, they are attempting to limit American fuel consumption for several reasons. For one, carbon emissions are a dangerous negative externality. One result of increased oil consumption is releasing greenhouse gasses into the atmosphere, which traps heat in the Earth. This contributes to climate change, a dangerous phenomenon that increases ocean levels and temperatures in general. This can significantly displace farm lands that are based on specific temperature expectations. Global warming is a dangerous potential result that must be combatted with some steps taken.

Oil consumption also has some other negative consequences that these standards can seek to alleviate. A great deal of American oil is imported from foreign nations, some of whom are countries that the United States faces tense relationships with. The need for foreign oil results in great deals of money leaving the United States to go to other countries. On top of this, it complicates the foreign relations of the government. Needing the oil some countries provide gives them more leverage in their relations and negotiations that take part with our country. Alleviating this need for foreign oil can be considered a top priority for the government.

However, there are issues with the idea of fuel efficiency standards. For one, there are tradeoffs involved with any policy of this type. Proof of this is simple; if gas mileage could be improved without any related negative effects it already would have been done. Car companies want to offer consumers better fuel efficiency, so the fact that we are at current levels as opposed to the standards proposed recently approved for 2025 implies that they feel consumers value efficiency less than the tradeoffs. For example, increased efficiency may mean lighter cars or more powerful engines. It can also mean more expensive cars as part of the cost for research and development needed gets passed on to consumers.

Another issue is that carbon emissions and petroleum consumption both occur in a very broad series of situations in human life while fuel efficiency standards deal with a very narrow slice. A person running their air conditioners on moderately hot days has negative effects and automobile efficiency standards will not do anything to help that. On top of that, it will take a long time for this policy to have any affect. The standards do not take effect for another thirteen years, a necessary stipulation due to the changes it is forcing on car companies. On top of that, it takes years for the stock of cars on the road to turn over. It could conceivably be 2030 before the majority of cars were built after these standards take effect.

While it also seems obvious that increased efficiency will reduce oil consumption, this effect will likely not be as large as it would seem. Consumers will likely respond to their increased efficiency by driving more often. This makes economic sense, as the cost of driving each mile decreases people will respond by driving more miles. This will wipe out some of the effect increased standards might have. While this also looks like a cost saving option, it is likely that if the savings from increased efficiency outweigh the increased cost of the cars, that we would already have that efficiency.

We should be careful not to demean increased standards too much, as they are certainly a way for the country to take a step in the correct direction. However, they are a highly imperfect step to take and one that should not make the job feel done. If efficiency standards are seen as a good enough response to the environmental, economic, and national security challenges that petroleum usage can create, then they may become an issue themselves. There are other options that do not have the problems of inadvertently increasing consumption in some areas or failing to deal with so many of the carbon emitting activities we participate in. And while these new standards are a good idea to undertake, they do not seem likely to have any effect for at least a decade and therefore steps must be taken in the meantime.

For these reasons, I believe fuel efficiency standards to be a very imperfect method for fighting the issues that come from global warming. A much better idea in my opinion, would be an increased tax on petroleum consumption. One caveat to that would be that it should be coupled with a tax cut, and specifically a regressive one to wipe out the revenue and progressivity changes that would result from the tax I am recommending. I believe this to be a superior policy for many reasons and the best way to reduce oil consumption and accomplish other positive things.

While the Law of Demand means that driving miles will increase with these new standards, the reverse holds true for the increased carbon taxes. Since any consumption of oil will be more expensive, there will be no rebound effect in which the benefits of the policy are undone somewhat by the policy itself. Each mile will be more expensive and therefore there will be less driven. A petroleum or carbon tax is simply the best way to decrease consumption of oil on the road and much more effective than the standards we seem to have settled on.

Perhaps the best argument for the increased tax on carbon emitting forms of energy is how much more broad they will be than ­efficiency standards. These standards will only be able to affect new cars, bought after 2025. They will make us buy more fuel efficient cars, but starting at that point they will actually make people drive more. A carbon tax will focus on reducing people’s willingness to consume gas at all points throughout the life of their cars. On top of that, it creates incentives for them to reduce their petroleum consumption in all walks of life. Using energy will be more expensive in the home and office as well as the car and the result will be shifts towards less of it being used.

The gasoline tax can also have many other positive effects. Not only is it an important environmental step, but reducing miles driven can reduce congestion on our roads and reduce the wear on our overburdened infrastructure. Public transportation will become more viable as its substitute, driving oneself, becomes more expensive. Perhaps best of all, the increased price of petroleum will make alternative energy sources more economical to use and also for companies to invest money into developing. The emission standards only incentivizes the development fuel efficiency up to the threshold being used, while the increased carbon taxes incentivizes all kinds of positive actions that will help reduce oil consumption.

Perhaps the one advantage that efficiency standards have is that they will perhaps bring more fuel efficient cars to other nations. Global climate change is an international problem and even if America solves it on our end, emissions from other countries will still end up in our atmosphere. By forcing the car companies to invest in more efficient cars perhaps that means they will develop the technology they need to market these cars in other countries. However, most industrialized countries already have more fuel efficient models available to them, precisely because they do tax gasoline at such higher rates than is done in America. Also, the developing nations, such as India and China, who contribute great deals of the carbon emitting in the world are not going to buy more expensive cars to help the environment as they feel they deserve the right to grow before curbing their own pollution as developed nations already did. Automobile companies will continue to roll out the cheapest cars they can in those nations, regardless of what they must market in America.

Once again, efficiency standards are not necessarily a bad idea themselves. They are well intentioned and will likely reduce oil consumption despite the rebound effect of people driving more. However, looking at them in the context of the alternatives, it becomes clear that they are not the best option for this policy goal. A carbon tax is a much better system, providing more benefits with fewer costs. While the extra spending on cars under these standards will go to various places, the extra spending under the carbon tax will go to the government and can be used to increase spending, cut taxes, or reduce the deficit. This is certainly a better option.

Please do not take the political expedient option and simply settle for these efficiency standards. These standards seem to be more popular because they are not called a tax and can be sold as savings. However, the cost of the increased mileage is likely to always be more than the savings. The carbon tax is a low rate on a broad sector, energy use fueled by petroleum while the efficiency standards impose a large cost on the small segment of people who are buying new cars. Broad, low rate tax increases are almost always a better bet policy wise than higher rates on narrow portions of society and this case is no difference.

Works Cited

Vlasic, Bill. “U.S. Sets High Long-Term Fuel Efficiency Rules for Automakers.” The New York Times. The New York Times, 29 Aug. 2012. Web. 28 Oct. 2012. <http://www.nytimes.com/2012/08/29/business/energy-environment/obama-unveils tighter-fuel-efficiency-standards.html>.