Wednesday, June 3, 2009

Cleaner Cars Increase Pollution?

Henry Hazlitt's one lesson of economics is to consider the unintended / unforeseen consequences of a particular policy: "The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy."

Could it be that the administration's proposed automotive fuel efficiency standards and tailpipe standards for C02 emissions (which are projected to raise the price of new cars by around $1,300, on average) might have the unintended effect of increasing pollution?
In today's automobile fleet, the majority of the pollution comes from the oldest, dirtiest cars. In fact, the dirtiest 10% of the cars account for more than 50% of smog and carbon monoxide. The dirtiest one-third of the fleet accounts for more than 80% of the pollution.. . . if you raise the price of new cars, people will buy fewer of them or, at a minimum, put off the purchase for a year or so while they drive the old clunker for a few thousand more miles. And fewer new cars means more pollution, which can cause significant health problems. Yet environmentalists and the press have ignored this issue, so as not to inject a note of complexity or doubt into the chorus of glee that greeted the president's attack on greenhouse-gas emissions.
Note: perhaps we would just be looking at a short-term spike in pollution while people put off the purchase of a new car. Eventually, those old clunkers have to die. So maybe the long-term impact is not as dire as the author implies.

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