Reason Foundation

http://reason.org
http://reason.org/news/show/but-who-will-drive-them-and-wh

Reason Foundation

But Who Will Drive Them? (and who will run the junk yards?)

Shirley Ybarra
January 21, 2009, 6:46pm

In a New York Times Editorial, the editors said: But a big obstacle remains to the greening of American drivers: the price tag. With gas prices likely to remain low as consumers grapple with recession, drivers are going to need extra motivation to swap their gas gluttons for the novel, environmentally friendly cars and trucks. If the incoming Obama administration is serious about its commitment to boost the fuel efficiency of the American fleet, it must put in place a mix of policies, beyond tightening fuel-economy standards for carmakers, to steer drivers to the new cars. The price of Ford's new hybrid Fusion sedan, estimated to travel a whopping 41 miles per gallon in the city, is expected to start at more than $27,000. The Volt, General Motors's high-profile plug-in car, could cost as much as $40,000. There are cheaper paths to environmental virtue: The Toyota Prius starts at only $22,000. And Honda's Insight hybrid – to go on sale later this year – is expected to cost less. Still, with gas below $2 a gallon and recession-ravaged consumers hanging tight to their wallets, even the cheaper hybrids have to compete with cars that run on boring old internal combustion engines. The Prius was the flavor of the month when gas prices soared to $4. But in December, Prius sales plummeted 45 percent compared with the same month a year earlier – more than the 36 percent drop in all car sales. Do the math. At $1.66 a gallon, the average gas price assumed in the government's 2009 energy guide, a hybrid Toyota Camry would only save the average driver about $250 a year in gas, compared with the regular Camry. But the hybrid costs $7,000 more." Good Point! They went on to say: A hefty gas tax would, of course, produce a strong incentive for drivers to switch to more fuel-efficient cars. But confronting a staggering economy, the Obama administration would be right to look for other options in the immediate future" A "hefty gas tax" ....maybe not a good point. And finally Another, more aggressive option floated last year by Alan Blinder, an economist at Princeton, would be for the government to buy up the most polluting and gas-hogging clunkers from American drivers and scrap them. " So the Federal government might run the junk yards also in the name of "stimulus"? Not such a good point!

Shirley Ybarra is Senior Transportation Policy Analyst


Print This