Matt explores the phenomenon of decreasing returns to scale:
Via Andrew Sullivan, Eric dePlace notes that "You save more fuel switching from a 15 to 18 mpg car than switching from a 50 to 100 mpg car." And so you do. A 15 MPG car would require 1,000 gallons of gas to drive 15,000 miles while an 18MPG car could get it done in just 833 gallons. That saves 167 gallons of gasoline. By contrast, since a 50 MPG only uses 300 gallons to go 15,000 miles, upgrading to 100 MPG can't save that much gas -- the super-efficient car uses 150 gallons.One moral of the story is that the MPG statistic is probably misleading a lot of people who aren't quantitatively sophisticated. In policy terms, meanwhile, the upshot is simply that it makes more sense to focus on raising the efficiency of the least-efficient vehicles than creating new super-cars. Of course, the genius of pricing carbon through a tax or through auctioned emissions permits is, once again, that is spares people the burden of trying to do all the math in our heads and just lets price signals automatically find the most economical way of reaching the targets.
This is a common mistake in assessing ratios. I've just finished a piece on the impending retirement of the Baby Boomers, and one of the things that's hard to explain is the accelerating nature of the problem. Since 1945, the year the Baby Boomers were born, the number of workers per retiree has fallen from 40 to about 3. The drop from 40 workers per retiree to, say, 10 workers sounds very large. But for the workers, it's a smaller change than the decline from 3 to 2. Just keeping retiree income steady (as a percentage of GDP) over the next 20 years will require every worker to increase their contributions to same by 50%.
Of course, on a slightly related note is the change in incentives. Making cars more fuel efficient may not really save any gas at all....or pollution.
Making cars more fuel efficient will most likely only make people drive more as opposed to alternative activities like staying home, planning fewer trips, living closer to work or car pooling.
IOW, making cars more fuel efficient will only guarantee that driving is cheaper and little else.
Taxing pollution is the only way to really cut down on TOTAL USAGE...or we could just keep letting the price of gas go up. That will do it too.
A little Christmas Eve pedantry requires disputing whether these are examples of decreasing returns to scale or diminishing marginal returns, since they hold other things constant.
Could you elaborate on the drop from 40 workers to 10? When I compute 3/2 = 40/x, I get a number larger than 10.
Let's say you want to raise $1000 to support retirees. With 40 workers, that takes $25 each; drop to 10 and now it's $100 each (or an increase of $75). With 3 workers, it's about $333 each; with 2, it's $500 each (or an increase of about $167).
On the other hand, if yu want to do it as percent increase (as implied by pct's equation), it's a 50% increase for the 3-2 workers and a 300% increase for the 40-10 workers.
Increased fuel efficiency will not "make" people drive more, but merely allow them to do so. In addition, the desire to drive more is not only not unlimited but the rate of increase in driving may confidently be expected to drop of as peoples approach the limits of their individual desire to travel more.
So, John V, why so down on increasing fuel efficiency? After all, that is far more likely to be the result of rising fuel prices rather than decreased driving.
Just keeping retiree income steady (as a percentage of GDP) over the next 20 years will require every worker to increase their contributions to same by 50%
I doubt that even accounts for the likely coming of an increase in average life-span.
Raise the retirement age. No more retirements at disgustingly young ages, as is so trendy now. Problem solved, end of discussion.
Yeah, obviously listing the increase per worker in percentage terms rather than nominal terms misses the whole point.
Also, what Yglesias's post fails to note is that you still save more fuel switching from a 15 mpg car to a 60 mpg car than from a 15 mpg car to a 30 mpg car.
It's very, very easy to find rationalizations not to do things to reduce fossil fuel consumption in a given fashion.
I burned a bunch of fossil fuels in order to visit my wife's family in Belgium for Christmas, and we were just discussing fuel efficiency. Over here, fuel efficiency ratings are done in terms of liters per 100 km. Putting aside the inherently confusing nature of the metric system, that seems to make more sense to me in terms of telling us how much gas we actually consume.
Exactly brooksfoe. I had to read that a couple times just to make sure I was getting the point. The numbers aren't incorrect but the context had me scratching my head.
Pop quiz: Who is the only presidential candidate able to both acknowledge the essence of Social Security (a Ponzi scheme) and work towards getting rid of it, since 99.9% of people would be better off keeping that 12.4% of their salary to invest as they see fit?
Or, we could pretend it could be "fixed" by printing money, increasing the tax, or raising the retirement age. Let's put that non-existent surplus in a lock box!
Making cars more fuel efficient will most likely only make people drive more as opposed to alternative activities like staying home, planning fewer trips, living closer to work or car pooling.
As was pointed out up-thread, the price of gas (and I guess guilt over environmental damage?) is only one factor limiting car use. There's also wear on the car itself, parking expenses, increasing insurance premiums, commuting headaches, etc.
Moreover, I don't know that people who drive inefficient vehicles are all that influenced by gas costs.
Re: I doubt that even accounts for the likely coming of an increase in average life-span.
Absent some major break-throughs in longevity research (possible, but nothing in the pipeline right now) I do not foresee any significant increase in life span. We're pretty much maxed on what medicine can do there.
brooksfoe wrote: Also, what Yglesias's post fails to note is that you still save more fuel switching from a 15 mpg car to a 60 mpg car than from a 15 mpg car to a 30 mpg car.
Yglesias is focusing on an efficiency improvement choice that most people in the real world will actually face, and pointing out that it makes a real-world difference. The greenies and trade press, meanwhile, tend to make hoopla out of Prius-to-Aptera types of improvements that are interesting in their own right, but are also presently comprised of a range of vehicles that cannot meet the needs of most people and therefore will not make a significant near-term difference in consumption.
I've always thought it was a bit misguided to focus on making smaller and more fuel efficient compact cars while essentially ignoring SUVs. I'm gratified to see that hybrid SUVs are finally making progress. We should be applying the cutting edge efficiency technology to SUVs, tractor-trailers, and pickup trucks not to small cars that already get good gas mileage.
EI
Absent some major break-throughs in longevity research (possible, but nothing in the pipeline right now) I do not foresee any significant increase in life span. We're pretty much maxed on what medicine can do there.
Less smokers, better pacemakers, better heart surgery techniques, better access to better medication, etc.
It's not that there will be a miracle wonder-drug that spontaneously adds five years, it's just that a lot of changes in medicine have happened between the WWII generation and the boomers.
Those changes will likely push longevity upward (something that use to be fatal at 70, such as an intense flu, is no longer fatal due to flu shots) but we won't know how far until the Boomers, I guess, actually start dying in large groups.
This is the sort of important but obscure point that can change the way in which we think about the issue. I'm embarrassed to admit that I hadn't realized this, and it really changes the relevant trade-offs.
Question for all my fellow die-hard free traders: doesn't this suggest that we should take another look at CAFE standards?
Assuming that some sort of carbon emmission reduction scheme is necessary (or at least politically inevitable), wouldn't it be less disruptive to raise the minimum acceptable fuel efficiency to, say 20 mpg than to administer an unwieldy cap and trade system?
(A carbon tax would be superior to both, but it would be political suicide, so I doubt we'll see one pass)