Thanks to Michael Levi, the always-interesting energy/climate blogger at the Council on Foreign Relations, for pointing out a neat new analysis of the cost of meeting the CAFE standards for cars. According to Soren Anderson (Michigan State) and James Salee (Chicago), it’s possible to infer this cost from the automakers’ choice of whether to exploit a loophole in the law that gives them mileage credits for flex-fuel vehicles. Their estimate, by the way, is startlingly modest – no more than $18 (measured in lost profit per car) to increase fuel economy by one mile per gallon.
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Cheaper Than You Think |
Professor Dieter Helm (Oxford) is a very fine fly fisherman, and an even better economist. If you haven’t done so, take a look at his new book “The Carbon Crunch: How We Are Getting Climate Change Wrong — and How to Fix It” for a bit of unconventional wisdom. He argues that politicians and the general public have not shown any real interest in addressing climate change. Helm argues that places like Europe should focus on setting a price for carbon that would cover consumption (and not just production), and that fracking could be a good “bridge” technology for reducing consumption of coal. The book is readable and insightful for those interested in the inside track on climate policy. 
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