Sunday, November 30, 2008

Another One For The Law Of Unintended Consequences File: Problems Plague U.S. Flex-Fuel Fleet

But first, a funny cartoon by Steve Breen of the San Diego Union-Tribune.

The cartoon has nothing to do with the topic. It comes from this Washington Post article Problems Plague U.S. Flex-Fuel Fleet. It seems the idea was to have government vehicles use alternative fuels to save gas. But the opposite has happened. Here are the key exerpts:

"But the costly effort to put more workers into vehicles powered by ethanol and other fuel alternatives has been fraught with problems, many of them caused by buying vehicles before fuel stations were in place to support them"

"Often, the vehicles come only with larger engines than the ones they replaced in the fleet. Consequently, the federal program -- known as EPAct -- has sometimes increased gasoline consumption and emission rates, the opposite of what was intended."

"The Postal Service illustrates the problem. It estimates that its 37,000 newer alternative-fuel delivery vans, which can run on high-grade ethanol, consumed 1.5 million additional gallons of gasoline last fiscal year because of the larger engines."

"The vehicles that would allow the agency to meet federal mandates were available in six- and eight-cylinder models"

"Alternative fuel was used less than 1 percent of the time in 2007-2008."

"Agencies were required to buy alternative-fuel vehicles but did not have to run them on alternative fuel."

This illustrates The Law Of Unintended Consequences. We may have well-meaning laws that should benefit society but people react to those laws and change their behavior sometimes in unexpected and undesirable ways. We see this here in this article. Another example would be rent controls. If you legally keep down the price of rent, landlords have less incentive to keep their buildings or construct new apartments. So the rental market (and renters) suffer even though that was not the intended result.


Anonymous said...

That is one of the Best cartoons ever. Do you agree with what Darwin would probably say??

Cyril Morong said...

I generally agree with it.

Today the car makers have to submit their plans to congress for loans. So it will depend on the details of those plans. But this puts congress in the business of making cars. That probably is not a good idea. I can understand that it is hard with a recession for the car makers to get loans. So maybe congress could help them

If they have a great plan just to get them through a short, rough period, it could work. But we are getting into alot of maybes.

I think the best thing is for the US car makers to downsize, sell assets and focus more on small cars (maybe that is a Darwinian adaptation). Americans will keep buying cars. We will buy more from the foreign makers and some of them are already in the US. So they can expand their operations.