Following on from Wednesday's posting, and turning to the more complicated question of our current energy problems, I'll toss out one new idea, aimed at bringing the growth in oil consumption in the transportation sector under control. While it's focused on cars, I recognize that trucking and airlines use a lot of fuel, too, and may require their own measures. Given my reticence about higher gasoline taxes, and the failure of past efforts to legislate improvements in fuel economy, I suggest we tackle the problem from a novel direction: horsepower.
When you review the evolution of cars over the last 15 years, our appetite for more power and speed has been the real villain of the piece, rather than the shift to SUVs, per se. Engine technology improved significantly during this period, but most of the potential fuel economy benefits of these advances were sacrificed in a race to boost horsepower, even for economy cars. For example, a 140 hp engine is now standard on the new Honda Civic , compared to the 67 hp powerplant of a 1980 model. Although horsepower isn't the only factor influencing fuel consumption, its importance expands when you consider indirect effects, such as enabling larger and heavier vehicles. Can you imagine a Lincoln Navigator powered by a 140 hp engine?
So why not tax excess horsepower, to encourage us to make do with less, and put downward pressure on many of the factors that have hurt fuel economy over the last 20 years? For example, we could start with a new-car tax of $1/hp for every horsepower over 100. This would apply on every car, without distinction to size, weight or class. This tax would increase by $1/hp/year, until it reached, say, $10/hp. In the case of my 270 hp Acura TL, for example, I'd pay an extra $170 if I were buying it now under this scheme, but if I bought the same new car with the same engine ten years from now, the tab would have risen to $1700. To make sure it bites properly, this tax should be collected at the time of purchase and not be financeable, so it couldn't be buried in the lease payments.
Compared to increasing our gas taxes, or imposing a tax on engine displacement, as some European countries do, this approach has the following advantages:
- It promotes efficient hybrid cars by exempting the horsepower from a hybrid's electric motors. At the same time, though, it doesn't reward "performance hybrids", which still need large gasoline engines.
- It also does not reward supercharging and turbocharging approaches that make small engines perform like big ones. That might be controversial, because turbos have been seen as being economical. They are, but only in relative terms, against the alternative of needing a bigger engine to get more power.
- It is much less regressive than fuel taxes, because it would be collected only on new car purchases, not used cars, and could be avoided entirely by purchasing appropriately economical vehicles.
- It helps offset the higher initial cost of diesel engines, which generate less horsepower for equivalent levels of performance (torque) vs. gasoline engines.
While it would clearly take years for the full fuel economy effect to be felt across the entire fleet, enacting such a tax would send a clear signal to carmakers and consumers that their priorities need to shift. I'm also aware that this tax violates my own dictum about focusing on desired outcomes, rather than on the means to them. However, it's still at least a step or two closer to that than a gas tax. It might also be more politically palatable than closing the SUV loophole in the CAFE standards, because it would preserve the critical right of consumer choice, while providing some serious incentives to move in the desired direction.