SOCIAL: interesting & different perspective on hybrids

[Peter Khoury]

DAVID LEONHARDT
Buy a Hybrid, and Save a Guzzler

Published: February 8, 2006
SOME of my favorite people drive a Prius. They bought the car,  
obviously, because they were worried about the planet. But the fringe  
benefits are pretty nice, too.




Just how stingy?


Prius drivers can use a carpool lane in some places even when no one  
else is in the car. No matter where they're driving, they coast down  
the road in a whisper-quiet hum unlike anything else. Best of all,  
even if no one likes admitting it, they get to enjoy the cool-kid  
cachet that comes with being an early adopter of a fad. No other  
vehicle has had a recurring role on the TV show "Curb Your Enthusiasm."

Now President Bush has taken the hybrid craze to a whole new level.  
To cure our addiction to oil, he said last week, we must invest in  
hybrid cars, hydrogen cars, even cars that run on wood chips and  
grass. Energy technology is having its big moment.

Too bad the benefits of our new cult car have been so exaggerated.

Let's start with the obvious advantage of hybrids. When you drive  
one, you burn less gas than you would in a regular car. A typical  
driver of a Prius will use about 250 fewer gallons of gasoline each  
year than somebody would in a Toyota Corolla, which gets 29 miles a  
gallon. That's doing everyone else a favor because gas use has other  
costs — like global warming and American troops stationed overseas  
— that nobody fully pays at the pump.

But the favor is not nearly as big as hybrid owners imagine, for two  
reasons. First, hybrids have the most overblown mileage ratings in  
the auto industry. In the government's road tests, which are  
conducted in a world without much traffic or any air-conditioning,  
the Prius gets 55 miles to the gallon. Consumer Reports says the car  
really goes 44 miles on a gallon of gas. When I used one last week —  
and there is no denying that it's a great car to drive — I got 45 in  
Manhattan and on local highways.

This is just the beginning of the story. The more time you spend  
looking at the economics of the hybrids, the less comfortable you get.

The most important reason is a government policy that, amazingly  
enough, seems almost intended to undercut the benefits of efficient  
cars. In 1978, Congress set a minimum corporate average fuel economy,  
known as CAFE, for all carmakers. Today, the minimum average for cars  
is 27.5 miles a gallon. (For S.U.V.'s and other light trucks, it is  
21.6.)

YOU can guess what this means for hybrids. Each one becomes a free  
pass for its manufacturer to sell a few extra gas guzzlers. For now,  
this is less true for Toyota's cars, because they're above the  
mileage requirement. But Toyota's trucks and the American automakers  
are right near the limits. So every Toyota Highlander hybrid S.U.V.  
begets a hulking Lexus S.U.V., and every Ford Escape — the hybrid  
S.U.V. that Kermit the Frog hawked during the Super Bowl — makes  
room for a Lincoln Navigator, which gets all of 12 miles a gallon.  
Instead of simply saving gas when you buy a hybrid, you're giving  
somebody else the right to use it.

The hybrid, then, is just about the perfect example of what's wrong  
with our energy policy. It's a Band-Aid that does a lot less to help  
the earth than we like to tell ourselves. When Vice President Dick  
Cheney dismissed conservation as "a sign of personal virtue" a few  
years back, a lot of environmentalists were disgusted. But that,  
sadly, is what a lot of well-meaning hybrid owners are driving: an  
expensive symbol that they're worried about our planet, rather than a  
true solution.

You can consider yourself a conservationist and still see the logic  
in this. As Jon Coifman, the media director of the Natural Resources  
Defense Council, says, "We're not going to kick our oil addiction  
with good will and personal virtue. You do need market signals, and  
you do need rules. And you need virtue. You need it all."

The simplest idea in economics, I think, is that people respond to  
the incentives they are given. It's why market economies have done so  
well. So if we have decided that we need to use less oil for our own  
good — which seems to be the case — we need big incentives to  
change our behavior.

A substantial gas tax would be the simplest, with other taxes being  
cut to keep down the overall burden. Car buyers could drive whatever  
they wanted, as long as they were paying the full cost of their gas,  
and automakers would respond with creative products. If we're not  
capable of having a serious discussion about new taxes, the second- 
best option would be lavish incentives for companies to sell a fuel- 
efficient fleet.

Jonathan Skinner, an economist at Dartmouth, has a nice way of  
thinking about this. Forget about the 250 gallons of gas that a Prius  
saves relative to a Corolla. An S.U.V. that gets 16 miles a gallon,  
like the Cadillac SRX, uses almost 600 fewer gallons annually than an  
11-mile-a-gallon Hummer H2, because small differences add up when gas  
is being burned so quickly. It's the person deciding between those  
two vehicles who needs some extra incentives.

Instead, the government is giving $3,000 tax credits to hybrid buyers  
and opening carpool lanes to them. As a result, some people are  
buying cars they don't need. So get this: Americans are now replacing  
perfectly good cars, like the Corolla, in the name of conservation.

There is one sign of improvement. The Environmental Protection Agency  
has announced that it is fixing its fuel-economy ratings. The  
stickers that appear on the windows of new cars will soon show more  
realistic mileage numbers.

Unfortunately, the E.P.A. is in charge of only the stickers. The  
Department of Transportation makes the fuel-economy rules — the ones  
that actually matter — and it's not planning any changes. It will  
proceed with the fiction that the Prius gets 55 miles to the gallon.  
This is our energy policy.


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