Much of the debate over controlling greenhouse gases is a variation of “pay now or pay later.” Pay a higher price (for a light bulb, refrigerator, or automobile) and save on more efficient operation later.
Since autos and light trucks account for more than a quarter of all GHG emissions in California, regulators are focusing their attention on more efficient automobiles. New technology to produce highly efficient cars will cost more, but the Air Resources Board, claims that “because these technology improvements will also reduce the operating cost of vehicles … the average consumer will ultimately save $30 a month.”
But are regulators considering all the operating costs of smaller or more efficient vehicles when determining a net benefit in purchasing and operating these vehicles? Perhaps not.
A recent report in the Wall Street Journal reveals there is more to cost than buying fuel. The cost to insure smaller or high technology vehicles is more than for larger or less fuel-efficient cars. And it isn’t a small difference.
For example, for a 40-year-old male, the miserly Honda Civic costs $412 more a year to insure than its big cousin, the Honda CR-V SUV, because small cars have higher premiums for personal injury protection for occupants and because they are more likely to be stolen than larger cars. So the better fuel efficiency of the Civic (assuming the current price of gas at $3.35 a gallon) won’t come into play until that car has been driven more than 13,600 miles.
A 2009 Toyota Camry hybrid costs $655 more a year to insure than its non-hybrid sibling – mostly because parts replacement is much more expensive for the high-tech vehicle. This means the fuel saving benefit for the hybrid will not become apparent until the car has been driven more than 18,450 miles.
Since the average passenger car in California travels less than 12,000 miles a year, these examples suggest there would be far less overall consumer savings than suggested by better fuel mileage alone. Advocates for cost-effective greenhouse gas reduction measures should take note, and include the full cost to the consumer of vehicle efficiency mandates.