The case of the missing gas mileage

Automakers have made great strides in fuel efficiency in recent decades — but the mileage numbers of individual vehicles have barely increased. An MIT economist explains the conundrum.


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Contrary to common perception, the major automakers have produced large increases in fuel efficiency through better technology in recent decades. There’s just one catch: All those advances have barely increased the mileage per gallon that autos actually achieve on the road.

Sound perplexing? This situation is the result of a trend newly quantified by MIT economist Christopher Knittel: Because automobiles are bigger and more powerful than they were three decades ago, major innovations in fuel efficiency have only produced minor gains in gas mileage.

Specifically, between 1980 and 2006, the average gas mileage of vehicles sold in the United States increased by slightly more than 15 percent — a relatively modest improvement. But during that time, Knittel has found, the average curb weight of those vehicles increased 26 percent, while their horsepower rose 107 percent. All factors being equal, fuel economy actually increased by 60 percent between 1980 and 2006, as Knittel shows in a new research paper, “Automobiles on Steroids,” just published in the American Economic Review (download PDF).

Thus if Americans today were driving cars of the same size and power that were typical in 1980, the country’s fleet of autos would have jumped from an average of about 23 miles per gallon (mpg) to roughly 37 mpg, well above the current average of around 27 mpg. Instead, Knittel says, “Most of that technological progress has gone into [compensating for] weight and horsepower.”

And considering that the transportation sector produces more than 30 percent of U.S. greenhouse gas emissions, turning that innovation into increased overall mileage would produce notable environmental benefits. For his part, Knittel thinks it is understandable that consumers would opt for large, powerful vehicles, and that the most logical way to reduce emissions is through an increased gas tax that leads consumers to value fuel efficiency more highly.

“When it comes to climate change, leaving the market alone isn’t going to lead to the efficient outcome,” Knittel says. “The right starting point is a gas tax.”

Giving the people what they want

While auto-industry critics have long called for new types of vehicles, such as gas-electric hybrids, Knittel’s research underscores the many ways that conventional internal-combustion engines have improved.

Among other innovations, as Knittel notes, efficient fuel-injection systems have replaced carburetors; most vehicles now have multiple camshafts (which control the valves in an engine), rather than just one, allowing for a smoother flow of fuel, air and exhaust in and out of engines; and variable-speed transmissions have let engines better regulate their revolutions per minute, saving fuel.

To be sure, the recent introduction of hybrids is also helping fleet-wide fuel efficiency. Of the thousands of autos Knittel scrutinized, the most fuel-efficient was the 2000 Honda Insight, the first hybrid model to enter mass production, at more than 70 mpg. (The least fuel-efficient car sold in the United States that Knittel found was the 1990 Lamborghini Countach, a high-end sports car that averaged fewer than nine mpg).  

To conduct his study, Knittel drew upon data from the National Highway Transportation Safety Administration, auto manufacturers and trade journals. As those numbers showed, a major reason fleet-wide mileage has only slowly increased is that so many Americans have chosen to buy bigger, less fuel-efficient vehicles. In 1980, light trucks represented about 20 percent of passenger vehicles sold in the United States. By 2004, light trucks — including SUVs — accounted for 51 percent of passenger-vehicle sales.

“I find little fault with the auto manufacturers, because there has been no incentive to put technologies into overall fuel economy,” Knittel says. “Firms are going to give consumers what they want, and if gas prices are low, consumers are going to want big, fast cars.” And between 1980 and 2004, gas prices dropped by 30 percent when adjusted for inflation.

The road ahead

Knittel’s research has impressed other scholars in the field of environmental economics. “I think this is a very convincing and important paper,” says Severin Borenstein, a professor at the Haas School of Business at the University of California at Berkeley. “The fact that cars have muscled up rather than become more efficient in the last three decades is known, but Chris has done the most credible job of measuring that tradeoff.” Adds Borenstein: “This paper should get a lot of attention when policymakers are thinking about what is achievable in improved automobile fuel economy.”

Indeed, Knittel asserts, given consumer preferences in autos, larger changes in fleet-wide gas mileage will occur only when policies change, too. “It’s the policymakers’ responsibility to create a structure that leads to these technologies being put toward fuel economy,” he says.

Among environmental policy analysts, the notion of a surcharge on fuel is widely supported. “I think 98 percent of economists would say that we need higher gas taxes,” Knittel says.

Instead, the major policy advance in this area occurring under the current administration has been a mandated rise in CAFE standards, the Corporate Average Fuel Economy of cars and trucks. In July, President Barack Obama announced new standards calling for a fleet-wide average of 35.5 mpg by 2016, and 54.5 mpg by 2025.

According to Knittel’s calculations, the automakers could meet the new CAFE standards by simply maintaining the rate of technological innovation experienced since 1980 while reducing the weight and horsepower of the average vehicle sold by 25 percent. Alternately, Knittel notes, a shift back to the average weight and power seen in 1980, along with a continuation of the trend toward greater fuel efficiency, would lead to a fleet-wide average of 52 mpg by 2020.

That said, Knittel is skeptical that CAFE standards by themselves will have the impact a new gas tax would. Such mileage regulations, he says, “end up reducing the cost of driving. If you force people to buy more fuel-efficient cars through CAFE standards, you actually get what’s called ‘rebound,’ and they drive more than they would have.” A gas tax, he believes, would create demand for more fuel-efficient cars without as much rebound, the phenomenon through which greater efficiency leads to potentially greater consumption.

Fuel efficiency, Knittel says, has come a long way in recent decades. But when it comes to getting those advances to have an impact out on the road, there is still a long way to go.


Topics: Automobiles, Climate change, Consumers, Economics, Efficiency, Energy, Management, Taxes

Comments

I recently rented a 2011 BMW 320d in the UK. It was a very sporty 2.0 Litre turbo diesel with 6 speed manual transmission & M sport equipment package. I picked it up in London, drove the highway to Wales, thrashed it for a week up through the mountains and still returned an average of 45 MPG for the entire trip. Most of the time I drove it like I had stolen it ... it was that much fun to drive. On the highway this car returned 67 MPG. They claim you could get 69 MPG, if you drive the speed limit :) Oh, did I mention it had the lowest CO2 emissions of all cars sold in Europe in 2009? (measured in CO2 g/KM) Q 1. Why can't we buy this car in the USA? (the smallest BMW turbo diesel engine available in the USA is a 3.5 litre which achieves 36 MPG) Q 2. Doesn't 70 MPG from a combustion engine make you wonder why a Prius hybrid only gets 60 MPG? Q 3. If you can buy a car that gets 70 MPG & drives like a sports car, why would you EVER want a hybrid with those big, nasty, heavy batteries?
Is their claim against US or Imperial gallons? Given the 20% difference the entire trip was at 36 mpg just about what BMW says for mixed driving. http://www.whatmpg.co.uk/BMW%20MPG%20Information.html http://forums.redflagdeals.com/archive/index.php/t-985028.html
Response to Q2: Actually, my Prius gets about 50 mpg (5280 ft/US Gal) as measured by the odometer and gas pump. The mileage varies seasonally, and has degraded slight as the battery aged (6 yrs old now), and as I returned to my old lead-footed driving style. Prior to reading your posting, I thought that 50mpg wasn't too bad. Regarding Q3: If you put a diesel engine in the Prius, taking advantage of the higher energy density in the fuel (+10%), and optimized the diesel engine for maximum mileage and anemic acceleration (made up for by the battery) I would expect that the diesel/electric mileage and the car's performance would be very competitive with the BMW. My guess on Q1: Car companies are assuming US buyers will always by a car based on horsepower, the sound of the engine, the size of the car and perceived performance. Since there is no market downside in the US for carbon emissions, and consumers are insensitive to fuel cost,the automotive industry is correct.
The article says that the auto manufacturers are not to blame for this phenomenon, but didn't they lobby against stricter CAFE standards and increased gas tax?
You know, in the last thirty years, we've had significant increases in the amount of equipment placed into cars for both emissions and driver safety. I see no mention of either of these factors.
An increased gas tax just disproportionately effects people who HAVE to drive. Not everyone lives in a city, but everyone does have to get to work. Mass transit isn't an option around here because there isn't any. Neither is walking. Things are just too spread out.
As oil becomes more expensive, our cars will become more European. Smaller; lighter; more fuel efficient. This advanced fliver will be more expensive than today's large car. Improving gas milage will not keep pace with rising fuel costs. On the plus side, we'll still have air conditioners and stellar audio. There will just be fewer of us listening to Lady Gaga in our Petite Voiture Americain.
A definition of "fuel efficiency" would be helpful in this article since the article sometimes does and sometimes does not relate it directly to mpg.
Part of the reason for 25% increased curb weight is federally-mandated safety standards for airbags, roof rollover, active headrests, etc. These federal standards often result in reduced safety. The huge C pillars required for rollover resistance make huge blind spots, greatly increasing accidents due to sideswipes.
I have to agree with the person who drove the car in England, we got similar mileage on a Peugeot in France. But, you can't buy these vehicles in the US because of very strict (compared to Europe) NOx rules in the US. It costs too much to eliminate this problem to make it feasible to sell these vehicles. Also, they usually come with a manual transmission, which will not pass the typical smog check.
"trend newly quantified by MIT economist Christopher Knittel" What took so long? Eleven years ago I wondered why my '98 Camry has worse fuel economy than my '86 Camry. Two things lept off the page of the owner's manual. The '98 engine has 16% more displacement, and the car weighs as much as a '75 Malibu. This was surprising, given the Malibu's much larger size. Those safety features must be quite heavy.
Thus the unmet promise of automotive aerodynamics. Reducing aerodynamic drag only realizes its full savings if the car's engine size is reduced to meet the lower requirements, because the gasoline engine becomes less efficient when the throttle is less open, partially offsetting the lower work done if the engine size is the same. But aerodynamics does nothing for acceleration, particularly from standing start; so reducing engine size would reduce acceleration. And the American public just won't go for that.
Please look at my safer car invention at www.safersmallcars.com and help connect me with the auto companies. The invention can save fuel and lives.
Firstly, as I appreciate the information in this article, its answers should be obvious to the casual observer. As long as this is a free country and the dollar is sound, people will gravitate to performance and luxury. Government needs to take a minimalist role is this sector of American life. Every time manufacturers are told to make more efficient cars, the public will find the loophole which allows them to still enjoy driving, i.e. heavier and more powerful cars, characteristics which weren't regulated. Beware the unintended consequences! Secondly, so much of the motivation to control other peoples' lives is based on the false and corrupt science behind global warming. As much as socialists want to control others behavior and wealth by shaming them into conforming behavior, the earth moves beneath our feet and the globe cycles based on the sun cycle and we humans are a trivial, nay unmeasurable, effect on earthquakes and atmospheric temperatures and the public ain't buying it.
Raising taxes on fuel is the last thing we want to do now. Unemployment is high, those on food stamps is at the highest level ever, mortgage foreclosures are still at a high level and house prices are at a low. Further, the government is discouraging oil production (Keystone) thus keeping gasoline prices high. The people of this country are suffering. An increase in fuel by imposing a tax would negatively affect food prices, the cost of commuting, the tourist industry and the economy in general. Higher costs would provide an incentive for employers to reduce employment further to reduce expenses Any recommendation like this should be made taking into consideration of the current economic environment. This information is readily available in newspapers such as the Wall Street Journal.
Study makes many good points. But projections of future possible improvements assume same rate of powertrain efficiency improvement after 2004. This is unlikely since improvements have already utilized the lowest cost "low hanging fruit" technologies. Hybridization costs much more than the improvements implemented between 1982 and 2004. Hybrids primarily improve overall MPG in city driving, not for highway. Diesels reduce fuel consumption for both city and highway driving. The latter is where most miles are driven. Also, improvements due to high MPGs (e.g., ~40 and above)are small since fuel consumption (inverse of MPG) decreases by only small amounts as MPG is increased above ~40 MPG.
Good comment about NOx emissions. US regs tends to place more emphasis on emissions, and Europe on fuel economy. Thus the ~50% market share of diesels in Europe... that and, until very recently, US diesel fuel had high sulfur content that poisoned costly emissions catalysts.
Fuel economy #'s in the US can be confusing. There's the federal CAFE numbers that the auto manufacturers must meet. Then there are the window sticker #'s we see at the dealer lot. And finally the real-world #'s we experience from driving. Due to different weighting formulas and historical conventions these #'s can be significantly different. Hope the author made these distinctions.
Sadly, most people don't know how to adjust their mirrors. When adjusted correctly, you will have NO blind spots, regardless of your side pillar width. There are many instructions available on how to correctly set your mirrors, e.g.: http://www.wikihow.com/Set-Rearview-Mirrors-to-Eliminate-Blind-Spots If only this were common knowledge...
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