Higher gas taxes may reduce commercial fuel consumption
New study finds that higher gas taxes may reduce fuel consumption by medium-sized and heavy-duty vehicles.
Fri, Apr 02, 2010 at 02:19 PM
Although the United States and Canadian governments just announced stronger emissions targets for passenger vehicles, something still needs to be done about the bevy of medium-sized and heavy-duty vehicles on the roads. A new study from the National Research Council (NRC) reports that higher gas taxes may be a better fuel saving alternative than mandating strong fuel efficiency targets for commercial vehicles.
The study, Technologies and Approaches to Reducing the Fuel Consumption of Medium- and Heavy-Duty Vehicles, was conducted by an assessment committee for the NRC’s Transportation Research Board. The committee recommends that regulators look at alternatives to mandated fuel efficiency standards for the commercial automotive market including expanded driver training that focuses on fuel-efficiency best practices, adjusting current size and weight restrictions, the development of intelligent vehicles and highway systems, and increasing fuel taxes.
While the committee understands the political hurdles of increasing taxes, it recommends that Congress consider an increase in fuel taxes as a viable alternative to commercial vehicle fuel-efficiency standards.
The committee says implementing a fuel tax will encourage trucking firms to focus on fuel efficiency since a fuel tax will directly affect their bottom line. Trucking firms implement fuel-saving technologies based on fuel prices, and not necessarily out of concern for the environment. Environmentally friendly, fuel-saving technologies just don’t give the firms enough return on their investment.
According to the report, “This social inefficiency can be corrected most efficiently by imposing a tax equal to the external costs. If, for example, the problem being addressed is carbon emissions, all transportation fuels should bear a tax proportional to their carbon content. If the price of fuel were higher to reflect the external costs, more fuel-saving technologies would be adopted. In addition, the higher price of fuel would lead to more fuel-efficient operations.”
The committee actually cites the European fuel market in its report. Fuel taxes are significantly higher in Europe and so fuel prices are also higher. The higher fuel prices have prompted one engine manufacturer to create a new engine that will reduce fuel consumption by 3 to 5 percent. The higher taxes have also led to a focus on vehicle aerodynamics, expanded driver training programs, and the use of diesel engines in the vast majority of commercial vehicles on European roads.
Obviously the higher fuel prices will end up being passed on to the customer through higher shipping costs. However, higher shipping costs will lead the customer to seek out lower shipping cost options, including rail transportation. This shift to rail-based shipping options will lower mileage by commercial vehicles and also reduce overall fuel consumption.
Fuel taxes are just one of the many topics covered in this report. Overall, the committee encourages regulators to implement low-cost methods of reducing fuel consumption before mandating higher fuel-efficiency standards.