interview > greene > greene 10
Greene 10 (1:13)
Topic(s): Car Culture / Efficiency
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I think the market for fuel economy
has two problems. First of all, as I said, it's not efficient, that is,
consumers are not paying close attention to fuel economy and what it's
worth to them when they purchase a vehicle. And so the market doesn't
operate efficiently. This is something we see in refrigerators, it's
something we see in home heating and air conditioning, it's not just in
the area of fuel economy that energy efficiency is not a well-functioning
The other thing is that the
problems we're worried about—oil dependence, greenhouse gas emissions,
energy sustainability—are public problems, they are society's
problems; they're not the individuals' problems and so very few
people will voluntarily go pay extra money to solve society's problems.
They'll do it if everybody has to do it, but to do it on their own, there
are just a relatively small number of altruistic people out there who will do
that. And so we have these two kinds of market failures, if you will, in the
market for fuel economy and that's why we have to have policies like fuel
economy standards to solve these problems.
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Created April 2008