Image: Christine Daniloff |
Contrary
to common perception, the major automakers have produced large increases in
fuel efficiency through better technology in recent decades. There’s just one
catch: All those advances have barely increased the mileage per gallon that
autos actually achieve on the road.
Sound
perplexing? This situation is the result of a trend newly quantified by Massachusetts
Institute of Technology (MIT) economist Christopher Knittel: Because
automobiles are bigger and more powerful than they were three decades ago,
major innovations in fuel efficiency have only produced minor gains in gas
mileage.
Specifically,
between 1980 and 2006, the average gas mileage of vehicles sold in the United
States increased by slightly more than 15%—a relatively modest improvement. But
during that time, Knittel has found, the average curb weight of those vehicles
increased 26%, while their horsepower rose 107%. All factors being equal, fuel
economy actually increased by 60% between 1980 and 2006, as Knittel shows in a
new research paper, “Automobiles on Steroids,” published in the American
Economic Review.
Thus
if Americans today were driving cars of the same size and power that were typical
in 1980, the country’s fleet of autos would have jumped from an average of
about 23 miles per gallon (mpg) to roughly 37 mpg, well above the current
average of around 27 mpg. Instead, Knittel says, “Most of that technological
progress has gone into [compensating for] weight and horsepower.”
And
considering that the transportation sector produces more than 30% of U.S. greenhouse
gas emissions, turning that innovation into increased overall mileage would
produce notable environmental benefits. For his part, Knittel thinks it is
understandable that consumers would opt for large, powerful vehicles, and that
the most logical way to reduce emissions is through an increased gas tax that
leads consumers to value fuel efficiency more highly.
“When
it comes to climate change, leaving the market alone isn’t going to lead to the
efficient outcome,” Knittel says. “The right starting point is a gas tax.”
Giving the people what they want
While auto-industry critics have long called for new types of vehicles, such as
gas-electric hybrids, Knittel’s research underscores the many ways that
conventional internal-combustion engines have improved.
Among
other innovations, as Knittel notes, efficient fuel-injection systems have
replaced carburetors; most vehicles now have multiple camshafts (which control
the valves in an engine), rather than just one, allowing for a smoother flow of
fuel, air and exhaust in and out of engines; and variable-speed transmissions
have let engines better regulate their revolutions per minute, saving fuel.
To
be sure, the recent introduction of hybrids is also helping fleet-wide fuel
efficiency. Of the thousands of autos Knittel scrutinized, the most
fuel-efficient was the 2000 Honda Insight, the first hybrid model to enter mass
production, at more than 70 mpg. (The least fuel-efficient car sold in the
United States that Knittel found was the 1990 Lamborghini Countach, a high-end
sports car that averaged fewer than 9 mpg).
To
conduct his study, Knittel drew upon data from the National Highway
Transportation Safety Administration, auto manufacturers, and trade journals.
As those numbers showed, a major reason fleet-wide mileage has only slowly
increased is that so many Americans have chosen to buy bigger, less
fuel-efficient vehicles. In 1980, light trucks represented about 20% of
passenger vehicles sold in the United
States. By 2004, light trucks—including SUVs—accounted
for 51% of passenger-vehicle sales.
“I
find little fault with the auto manufacturers, because there has been no
incentive to put technologies into overall fuel economy,” Knittel says. “Firms
are going to give consumers what they want, and if gas prices are low,
consumers are going to want big, fast cars.” And between 1980 and 2004, gas
prices dropped by 30% when adjusted for inflation.
The road ahead
Knittel’s research has impressed other scholars in the field of environmental
economics. “I think this is a very convincing and important paper,” says
Severin Borenstein, a professor at the Haas School of Business at the University of California
at Berkeley. “The fact that cars have muscled up rather than become more efficient in the
last three decades is known, but Chris has done the most credible job of
measuring that tradeoff.” Adds Borenstein: “This paper should get a lot of
attention when policymakers are thinking about what is achievable in improved
automobile fuel economy.”
Indeed,
Knittel asserts, given consumer preferences in autos, larger changes in
fleet-wide gas mileage will occur only when policies change, too. “It’s the
policymakers’ responsibility to create a structure that leads to these
technologies being put toward fuel economy,” he says.
Among
environmental policy analysts, the notion of a surcharge on fuel is widely
supported. “I think 98% of economists would say that we need higher gas taxes,”
Knittel says.
Instead,
the major policy advance in this area occurring under the current
administration has been a mandated rise in CAFE standards, the Corporate
Average Fuel Economy of cars and trucks. In July, President Barack Obama
announced new standards calling for a fleet-wide average of 35.5 mpg by 2016,
and 54.5 mpg by 2025.
According
to Knittel’s calculations, the automakers could meet the new CAFE standards by
simply maintaining the rate of technological innovation experienced since 1980
while reducing the weight and horsepower of the average vehicle sold by 25%.
Alternately, Knittel notes, a shift back to the average weight and power seen
in 1980, along with a continuation of the trend toward greater fuel efficiency,
would lead to a fleet-wide average of 52 mpg by 2020.
That
said, Knittel is skeptical that CAFE standards by themselves will have the
impact a new gas tax would. Such mileage regulations, he says, “end up reducing
the cost of driving. If you force people to buy more fuel-efficient cars
through CAFE standards, you actually get what’s called ‘rebound,’ and they
drive more than they would have.” A gas tax, he believes, would create demand
for more fuel-efficient cars without as much rebound, the phenomenon through
which greater efficiency leads to potentially greater consumption.
Fuel
efficiency, Knittel says, has come a long way in recent decades. But when it
comes to getting those advances to have an impact out on the road, there is
still a long way to go.
