Consumer Energy Report is now Energy Trends Insider -- Read More »

By Robert Rapier on Oct 5, 2007 with no responses

Debunking Thomas Friedman

I am in Norway at the moment, but I ran across a story that I wanted to call attention to. It is the same thing I wrote about in The Problem with CAFE:

Debunking auto industry myths

NEW YORK (Fortune) — I hesitate to pick a fight with a two-time Pulitzer Prize-winner like New York Times columnist Thomas Friedman. On the critical issue of developing a national energy policy to lessen our consumption of imported oil, he’s been early, smart, and right.

But Friedman whiffed in his Times column yesterday, called “Et Tu, Toyota,” by hauling out one of the hoariest of urban myths: That forcing higher fuel economy standards on American car buyers is what’s needed to encourage more energy-efficient vehicles and make Detroit more competitive with its import competitors.

That’s wrong…and wrong. Forcing people to buy more efficient cars by ordering car companies to make them is like forcing people to lose weight by banning food companies from selling Big Macs and pizzas. The reason Americans consume so much gasoline is that they like their big pickup trucks, SUVs, and V-8 engines. The reason the automakers make them is because people want to buy them.

That’s exactly what I have argued. Fuel efficient vehicles are not in short supply. But the demand is not there. This is not a supply-side problem; we have to work on increasing demand for efficient vehicles. Ramp up demand, and the supply of vehicles will come.

Some of the points that Friedman makes to buttress his arguments are misleading. He praises Japan and Europe for auto fleets that have much better mileage standards than the U.S. without mentioning the fact that driving conditions are different – try steering a Lincoln Navigator through a medieval village in Italy – and gasoline taxes in those countries are so high that people are willing to squeeze into small cars. Start charging American drivers $8 a gallon and they’ll switch to small cars in a New York minute.

Exactly. Friedman has entirely missed the point on why autos here in Europe are so much more fuel efficient. If gasoline was 2 bucks a gallon here, I suspect things would be a bit different. And the puzzling thing to me is that a couple of years ago, in an interview with Grist, Friedman seemed to clearly understand the issue:

Q. Besides a gas tax, what other methods for reducing energy dependence would you propose?

A. I’d focus on two other things: I would begin building more nuclear power, and I’d have a carbon tax on coal and all high-emission energies that would raise their cost and make wind and solar much more cost-efficient.

Q. What about regulatory initiatives like CAFE standards?

A. That to me is captured by the [gas] tax because that makes hybrids a necessity and forces Detroit to convert large amounts of its fleet to hybrid technology – you drive the CAFE issue using a different mechanism.

But Friedman appears to have forgotten that logic, judging from his most recent article. Back to the CNN article:

American manufacturers DO build fuel-efficient cars but Americans don’t buy them. Ford (Charts, Fortune 500) is currently offering cut-rate financing on the 2008 Escape Hybrid, while GM (Charts, Fortune 500) is subsidizing the smallest car in its lineup, the Chevy Aveo. And GM can brag all it wants about having more models – 30 of them – than any other manufacturer that get more than 30 miles per gallon on the highway, but it gets precious little credit for it in the marketplace.

It has been argued here before that if the government wants to be serious about improving fuel economy, all it has to do is boost the tax on gasoline. The revenue generated could be rebated to lower-income drivers who are truly disadvantaged or invested in mass transit. The auto companies aren’t going to argue for such a tax because it would give them a black eye with consumers. And the government won’t do it either, because of its anti-tax bias. But Friedman, using his column as a bully pulpit, could argue for such a tax with impunity. And it would be a whole lot more effective than perpetuating the old myth about the ignorant luddites in Detroit who are withholding the small, fuel-sipping cars that Americans really want to buy.

I think Friedman is a guy who is really passionate and concerned about our energy policy. But he has gotten ahead of himself at times. He was on the ethanol can save us bandwagon early on, but it looks like he now he is exclusively on the sugarcane ethanol will save us bandwagon. I agree, sugarcane ethanol is a lot better than corn ethanol, but it helps to understand the scale of our oil consumption, so one can appreciate the scale of the ethanol production that would be required to displace it.

OK, back to meetings. Now, if I can figure out how to publish. For some reason, all the instructions for my blog are in Norwegian. I am having to guess at what Innlegg, Innstillinger, Mal, and Skriv mean. This keyboard is also unfamiliar. Some of the keys are out of place, and it also has letters like æ, å, and ø. Let’s see if “Publiser Innlegg” gets this published.