The New York Times describes one of the hazards of doing new things: your new thing may not fit neatly into existing regulatory category. A case in point: Two new cars that can be recharged electrically are creating a puzzle for the Environmental Protection Agency, which must rate the “fuel economy” of passenger cars and light trucks sold by manufacturers covered by Corporate Average Fuel Economy standards.
How the Environmental Protection Agency rates the two cars, the Chevrolet Volt and Nissan Leaf, could have a big influence on consumers’ perceptions of vehicles that run on electricity. General Motors, which makes the Volt, and Nissan are anxiously awaiting the agency’s decision as they start production of the cars and complete marketing plans for rollouts in December.
Providing the customary city and highway miles-per-gallon information would make little sense for the Volt, which can drive 25 to 50 miles on battery power before its gas engine kicks on, and even less so for the Leaf, which is powered by only a rechargeable battery.
Another example of how hard it is to provide simple incentives in a complex world (a recent previous example here). My simple proposal: pull the plug on CAFE standards. Any half-way complete accounting of costs and benefits would find CAFE makes us worse off overall. To the extent CAFE standards were ever aimed at desired public policy goals, more economical policies must be available.