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Greene 16 (2:05)
Topic(s): Auto Industry / Car Culture / Efficiency
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So we have this broad, relatively flat net benefit over fuel economy. So the consumer says, "Well, whatever. If it costs more but it gets 35, that's fine. If it costs less and it gets 30, that's fine too." And their indifference is rational, sensible, because what they gain in fuel savings in the future, they pay in increased price now. So we have relative indifference on the part of the consumer to using technology to improve fuel economy.

Now look at it from the manufacturer's viewpoint: I've got to change the engine, I've got to change the transmission, I've got to redesign the body to be more aerodynamic. I have to redesign the whole car and not just one car, but every car I make if I want to get a 10-, 12-mpg improvement in my fleet of cars. That's going to take 8 or 10 years, it's going to take the attention of all my engineers and designers, it's going to cost me billions and billions of dollars in retooling, and for what? The consumer doesn't even care that much about it. So what am I going to do? I'm going to sell the consumer what he wants, what he— what I can gain his interest in, what excites him. What excites him? Well, bigger, more powerful, sexier image, and so that's what I do.

The problem with that is it doesn't solve our societal problems. It doesn't solve oil dependence, it doesn't solve climate change, and it doesn't get us to a sustainable transportation system. So we have to have some policy. We have to have some societal intervention that says: All that's well and good, but we're going to reduce our oil consumption, we're going to reduce our greenhouse gas emissions, but we want to do it in a sensible way, in a way that doesn't wreck our economy or make people change lifestyles in the ways that aren't acceptable to them.