Sam Kazman, of the Competitive Enterprise Institute, opines on the loss of spare tires in some new car models:
Fewer tires, higher taxes.
That may be what’s in store for drivers under the federal government’s spiraling fuel economy mandates (known as CAFE, for Corporate Average Fuel Economy). The Department of Transportation is floating 62 mpg as a possible standard for 2025, more than double the current 27.5 mpg standard. How the industry can meet that target, and at what cost, is anyone’s guess. A new study in mid-June by the nonprofit Center for Automotive Research in Ann Arbor, Mich. put the tab at about $10,000 extra per new vehicle, while admitting that even this estimate might be far too low.
And that’s not the only bad news; in the past few weeks there have been two other unwelcome developments. First, GM announced that several versions of its compact Chevy Cruze would no longer have spare tires; instead, they’ll have vehicle-powered sealant repair kits. This is a major jump in the trend toward eliminating spare tires, a trend due largely to CAFE’s drive to shed every possible ounce of car weight.
Some argue that spare tires are unnecessary, given the growing presence of run-flat tires, tire pressure monitors, and roadside assistance systems. But the fact that spares are being eliminated in the name of fuel economy, rather than market demand, demolishes one of the chief claims of CAFE’s advocates. For several decades, the need to reduce vehicle size and weight in order to raise mileage has been CAFE’s Achilles’ heel. Smaller, lighter cars not only hold fewer passengers and less baggage; they’re also less crashworthy. CAFE-induced downsizing causes several thousand additional traffic deaths per year.
I’m not sure how clearly the loss of spare times can be linked to CAFE, but clearly shedding weight improves fuel economy and therefore is CAFE-relevant. In fact, so long as an automaker is pressed up against the compliance limit, all decisions affecting fuel economy will involve trade offs between consumer demand and regulatory compliance. GM may be testing consumer reactions to elimination of spare times by introducing the innovation on just a few models.
And if there were evidence that CAFE regulation actually secured net public benefits in a cost effective manner, then stories about innovations in regulatory compliance would be good news. In such a case this development would be evidence of companies bringing down the cost of securing a public good. Unfortunately, it just ain’t so.
Christopher Knittel, now at MIT, has summarized the results of some of his recent work as ” performance standards – such as CAFE standards – may be more inefficient than previously thought, and that pricing instruments, such as a gas tax, would likely have a bigger impact on reducing greenhouse gas emissions.” Note that he says “more inefficient than previously thought,” and while the academic literature on CAFE is diverse and complicated, CAFE has never been seen as a particularly efficient set of regulations.