Gas is cheap right now. Now, that isn't to say that gas will be cheap IN THE FUTURE; in fact, I think the opposite is the case (more on that later). But, consumers have short attention spans and SUVs are starting to look more and more attractive, while hybrids... aren't. Already Prius sales are down 48.3% over last year, while the iconic SUV of the 1990s, the Ford Escape, saw its sales drop a mere -19.1%. The F-series of trucks are again the best selling nameplate in the United States. Toyota ended up selling more of their SUV RAV4s then Priuses.
My broader point here is: how are we going to tell General Motors and Ford to "green" their operations when the market is desperately telling them to go in the opposite direction. Gas-guzzling models are their strong suits (they dominate the market), while small cars are weak for them (Ford has only one car on the top-sellers list, Chevrolet has only one as well, and Chrystler has ZERO). Why would then voluntarily move from a strong niche in their industry to something that they are bad at?
The answer there is that regulations will force them, but regulations cannot solve all of these problems. If gas is cheap, consumers will find a way to buy cars like Hummers, just like fuel economy regulations didn't stop the production of these cars in the 1990s. There are a number of loopholes in the current law; GM and Ford could just use the ethanol credit (which gives a boost in fuel economy numbers for ethanol-enabled vehicles, despite the number of problems with ethanol) to artifically meet the standards without actually improving fuel economy.
My position is that there is a better way to incentive fuel economy, reducing driving (which decreases congestion AND reduces gasoline consumption at the same time), speeds up the development of alternative fuels, and encourages people to take public transit at the same time. And that policy, my friends, is not fuel economy standards; the answer is high gasoline taxes. After all, Europe's high gas prices probably do more to encourage efficient cars than our regulations have.
So, what's the flaw in my argument?
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