American policy has targeted a unique path to fuel economy: simultaneous cheap gas and small, fuel-efficient cars. As a matter of economics, these outcomes tend to contradict. When gas is cheap, consumers are more inclined to buy large cars. As other countries have discovered, buyers are most likely to choose fuel-efficient vehicles when gas is expensive. Given the Trump administration's recent moves to loosen fuel efficiency mandates, it seems possible that American policymakers may move to a more rational combination of policy goals, writes Bruce Yandle.
Read it here: The Beginning of the End for Fuel Efficiency Mandates