The CEO of the Ford Motor Co. said the first upgrade to the nation's fuel economy standards in a generation -- a key piece of the Senate's energy policy -- would force carmakers to produce more small cars than Americans want, and that will hurt profits for companies like his.
Ford Motor Co. president and chief executive Alan Mulally called the corporate average fuel economy standards, known as CAFE, a "market-distorting policy" like no other, according to the Toronto Star. True, the American car buying public is a bit schizophrenic when it comes to buying cars. Sales of SUVs and other big vehicles have dominated the automobile market for years, as the perception of safety, the desire of one-upmanship and savvy lifestyle-oriented advertising drove sales. At the same time, public opinion polls routinely found Americans in support of increased fuel economy standards.
The latest results came at the end of July, when the Pew Campaign for Automobile Fuel Efficiency found "overwhelming" support for the House to pass legislation that mirrors the Senate's. It did not, though the rule could still emerge in the nation's energy policy from the negotiations between the houses. A recent piece in the New Yorker dealt with our schizophrenia over fuel economy -- arguing that federal rules are needed to help the market support the popular public good compete against the otherwise small-minded decisions individual consumers make.
People believe that bigger and heavier cars are safer in a crash (forgetting that, often, bigger cars are also more likely to crash). And people like the fact that driving a higher-horsepower car makes you look better at the stoplight. So our desires as individuals to protect ourselves and to outclass our neighbors encourage us to buy bigger and bigger vehicles with more and more horsepower. And the market doesn''t create counter-incentives that would push us in a responsible direction, since someone who drives a Hummer doesn''t suffer the effects of pollution and global warming any more than someone driving a Prius does, and isn''t charged more for the extra environmental damage.
The environmental benefits are key. Advocates say an upgrade to the fuel economy standards -- from an average of about 25 to about 35, as the Senate wants -- would have the single largest impact of any measure that currently has enough political currency to buy a vote. With the threat of global warming clearly manifesting itself in extreme and deadly weather around the world, the time is now (yesterday really) to start turning our energy use policies around. Sorry, Ford, but the people have spoken.
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