Major Automotive Publisher Bills CAFE a Failure, Suggests Raising Gas Prices

May 27, 2009

Keith Crain’s family has been publishing trade newspapers since 1916.  Today, Crain Communications focuses heavily on the auto industry, publishing both Automotive News and AutoWeek.  As chairman of the board, Keith Crain has extensive experience following the automotive industry and can be expected to have some interesting insight.  Thus, when he recently sounded off on CAFE, many listened.

Mr. Crain published an editorial basically stating that while CAFE standards — Corporate Average Fuel Economy standards — succeeded in raising fuel economy and lowering automotive air pollution, it was an exercise in consumer deception making it, in his mind, a failure.  Mr. Crane says that that CAFE drove automakers to adapt vehicles in the 70s, 80s, and 90s to lower NOx gas emissions, carbon dioxide emission, while raising fuel economy and engine power.

However, he says that after 34 years, the ultimate legacy is more expensive vehicles and unfortunate shifting of blame for prices onto the automakers.  He says that studies have shown that raising the price of gasoline could much more effectively change citizens’ driving habits and deliver comparable cuts, via people selecting smaller cars and driving less.  He says that politicians are too afraid, though, to step up to the plate when it comes to gas price increases.

Instead, he says, they played a shell game, shifting blame onto the automakers.  By mandating CAFE, prices have slowly and steadily crept upwards (barring the recent round of survivalist discounting).  As a result, many believe that auto companies are to blame for these higher prices, while politicians escape criticism.

He says this trend is continuing with the Obama administration’s latest stringent boosts to CAFE. The latest standards will make large vehicles like SUVs and large trucks more expensive to buy, prohibitively expensive for some.  While this shifts consumers towards small cars, he says raising gas prices would be much more transparent and less harmful to the auto industry.

He writes, "We had to change consumer habits. But Congress and the executive branch didn’t have the guts to do what should have been done to reduce fuel consumption and encourage development of alternative fuels. They don’t have the guts now either."

While many will likely disagree with Mr. Crain’s remarks, he does paint an interesting picture, the kind only an industry insider truly could.  His remarks provide an ideal starting point to a more general debate about CAFE, its role in the industry, and possible alternatives.

This post has been written by Jason Mick on May 26, 2009 3:06 PM couresy of dailytech.com.

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