Gas Hogs

NYTimes:Culling the Gas Hogs

The “cash for clunkers” program seems to be doing its job: people flocked to dealerships to use the rebates and trade in their old vehicles for new, more efficient ones. Dealers estimate they sold nearly a quarter million cars under the plan, almost exhausting the program’s $1 billion budget in about 10 days. The new cars achieved 10 miles per gallon more, on average, than the trade-ins.

This was an encouraging sign that incentives can persuade drivers to ditch gas hogs for smaller and more fuel-efficient cars. Congress was right to add $2 billion to extend the program until Labor Day. But the success of the program cannot obscure the fact that many Americans remain wedded to the guzzlers and that their enthusiasm for smaller, more efficient vehicles is likely to diminish once the clunkers money runs out.

Sales of pickup trucks and S.U.V.’s, which tumbled as gasoline reached $4 a gallon last year, started recovering market share as soon as gas prices receded. In June, before the clunkers program was switched on, about 25 percent fewer pickup trucks were sold than a year earlier. But June sales of compact cars were down by 42 percent. The Ford F-Series pickup, which was briefly bumped last year from its long-standing position as the nation’s top-selling brand, regained its perch.

The fuel-efficiency goals announced by the president in May could be a big step forward: a fleetwide average of 35.5 miles per gallon by 2016, a significant increase from today’s fleetwide average of about 28 m.p.g. These standards will theoretically be reinforced by new limits on tailpipe emissions of carbon dioxide, a greenhouse gas.

But some experts worry that loopholes could yet undermine Mr. Obama’s goals. This has happened before. The original fuel economy standards enacted in the mid-1970s were later weakened by the so-called S.U.V. loophole, allowing carmakers to redefine S.U.V.’s and minivans as light trucks, which face much lower fuel-efficiency standards than ordinary cars. Consumers, enjoying cheap gasoline, flocked to the big vehicles, which soon dominated the market.

Under the Obama plan, cars and light trucks would, as before, be governed by separate standards. But this time the manufacturers should be required to meet an overall target for their entire fleet.

Policy makers could do even more to push consumers in the right direction by giving them a clear financial incentive to buy fuel-efficient vehicles. And that, in turn, could mean a gas tax — the most effective way we can think of to keep fuel prices high enough to make people think twice before buying a guzzler. One study of car sales from 1999 to 2007 concluded that a $1 increase in the price of gas cut the market share of S.U.V.’s by more than 11 percent and raised the market share of compacts by about 17 percent.

Any gas tax scheme should include some mechanism like tax credits to protect low-income consumers. But coupled with the new fuel economy standards, such a tax could take this country a long way toward reducing carbon emissions.

Drivers embrace fuel economy when gas hits $4 a gallon. Some device is needed to encourage them when it drops below that.