Saturday, June 29, 2019

Fuel efficiency targets and reductions in fuel consumed by vehicle class

This post compare  reductions in fuel consumed from improving the fuel efficiency of the least fuel efficient vehicle in each size class to reduction in fuel consumed from improving the fuel efficiency of the most efficient vehicle in each size class.

Question:  Below is data on the least and most fuel-efficient vehicles in two vehicle classes – Midsize Cars and Large Cars.



Least and Most Fuel-Efficient
Midsize and Large Cars
Midsize Cars
Least Fuel Efficient
Ferrari
13
Most Fuel Efficient
Ford Fusion &
Toyota Prius
58
Difference
45
Large Cars
Least Fuel Efficient
Rolls Royce
14
Most Fuel Efficient
Chevy Impala
29
Difference
15


What is the amount of reduction in gasoline consumed achieved by a 10% improvement in fuel efficiency for the least fuel-efficient vehicle in each vehicle class for a driver that travels 15,000 miles?

What is the reduction in gasoline consumed for the same amount traveled (15,000 miles) for a 10% improvement in the fuel efficiency of the most fuel-efficient vehicle in each class?

What  might this imply about the type of vehicle, which should receive more stringent fuel efficient regulations?

Why might this policy suggestion be incorrect?


Answer to Math Questions: Divide 15,000 miles by current mpg to get gas consumed at current mpg.  Divide 15,000 miles by mpg x 1.10 to get gas consumption at improved fuel efficiency.    Take the difference.



Reduction In Gas Consumption From 10%
 Improvement in Fuel Efficiency
Gas Consumed at Current MPG
Gas Consumed at MPG 10% Higher
Reduced Gas  Consumption
Ferrari
1153.8
1049.0
104.9
Ford Fusion & Toyota Prius
258.6
235.1
23.5
Rolls Royce
1071.4
974.0
97.4
Chevy Impala
517.2
470.2
47.0


Policy Assessment Questions:  

The improvement in fuel efficiency for the least fuel efficient vehicle leads to a much larger reduction in fuel consumed.   This suggests regulators should implement tougher regulations on the least fuel efficient vehicles.

But let's be real!   There really aren't may Ferraris and Rolls Royces on the road.   The better play at this end of the market is to impose a tax on these inefficient vehicles, let rich people have some fun and use the tax revenue for something socially desirable.


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