Crandall and Singer Critique Strengthening CAFE Standards in Wall Street Journal Op-ed

September 6, 2007

Criterion co-founder Robert W. Crandall and President Hal J. Singer published an op-ed in the Wall Street Journal today entitled "Don’t Drink the CAFE Kool-Aid." Crandall and Singer critique several bills working their way through Congress that would increase the corporate average fuel economy standard (CAFE) for cars and light trucks by 4% a year.

Crandall and Singer note that any call for regulation must be based on a market "failure"—in the case of the current call for increases in CAFE, the market failure is generally identified as global warming or national security. They explain that CAFE is a horribly inefficient mechanism for reducing carbon emissions because it does nothing to reduce emissions from power plants, older vehicles, home furnaces or industrial facilities nor would it apply to emissions outside the U.S.

Crandall and Singer argue that even if one accepts the debatable proposition that less reliance on oil would improve our national security, U.S. lawmakers should focus their attention on all oil consumption, not just that used in new vehicles. They conclude that the alleged benefits of more stringent CAFE standards burn away when exposed to the piercing light of economic analysis.

To read their op-ed in full, click here.