Gas tax must fight power and weight, says researcher
An economist at the Massachusetts Institute of Technology has suggested higher gas taxes should be introduced to influence car buyers. The call comes following the publication of research which shows how improvements in fuel efficiency over the last 25 years have been blunted as car buyers switched to heavier and more powerful vehicles.
According to research by economist Christopher Knittel published in the American Economic Review (PDF), between 1980 and 2006 the average fuel economy of vehicles sold in the US improved by about 15%. At the same time, average kerb weight increased by 26% and average power output increased by 107%. If weight and power had remained static, fuel economy would actually have improved by 60%, taking the average from about 23mpg then to 37mpg now, well above the current average of around 27mpg (all in miles per US gallon).
The increases in weight and power have not come directly from changes to vehicle specifications, but by changes in the vehicles Americans buy. For instance, over the period light truck and SUV sales increased from 20% of all sales to more than 50%.
"If gas prices are low, consumers are going to want big, fast cars," Knittel notes, pointing out that between 1980 and 2004, gas prices in the US dropped by 30% when adjusted for inflation.
Rising fuel economy standards, such as the new CAFE standards announced by President Obama in July are little help, Knittel says. "If you force people to buy more fuel-efficient cars through CAFE standards, you actually get what’s called ‘rebound,’ and they drive more than they would have." A gas tax, he believes, would create demand for more fuel-efficient cars without as much rebound.
"When it comes to climate change, leaving the market alone isn’t going to lead to the efficient outcome," he says. "The right starting point is a gas tax. I think 98 percent of economists would say that we need higher gas taxes."