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The Price of Big Government

Do the benefits ever outweigh the costs?

A. Barton Hinkle
July 8, 2011

The bio for James Delingpole of the London Telegraph describes him as "a writer, journalist, and broadcaster who is right about everything." The rest of us should probably heed the counsel of a woman of my acquaintance who advises remaining open to the possibility that we might—just might!—occasionally be wrong.

There are lots of reasons to do so—e.g., well-deserved humility. What Churchill once said of Clement Atlee must be said as well of the journalist: "He is a humble man, with much to be humble about." Also, many issues resemble chess: You’re no good if you can’t play both sides of the board. Then there is confirmation bias: the annoying tendency (annoying in other people, anyway) to see only the evidence that agrees with us, and to avert our eyes from the evidence that does not.

So: Last week this column looked at the Obama administration’s proposal to raise corporate average fuel economy (CAFE) standards. It concluded, based on voluminous studies over the past couple of decades, that higher gas-mileage standards will, ceteris paribus, increase roadway fatalities. Tongue-in-cheek conclusion: Maybe government policies should come with warning labels like the gruesome ones now required for cigarettes.

But there are broader ways to look at the issue. For instance, one correspondent asks: What about the cost of blood for oil? "We are currently at war in two oil states (Iraq and Libya)," he writes, "and our third war (Afghanistan) was basically started by our pursuit of a renegade Saudi (named bin Laden) who happened to resent our influence in his native land."

Seems like a fair question. So far the U.S. has lost nearly 4,500 service members in Iraq and another 1,650 in Afghanistan. Assume—if only for the sake of argument—that the wars were fought solely for oil. According to the Energy Information Administration, the top six foreign suppliers of oil to the United States are Canada, Saudi Arabia, Mexico, Venezuela, Nigeria, and Iraq. Avoiding the war deaths would have required America to reduce petroleum consumption so much that it no longer needed oil from its second- and sixth-biggest suppliers.

Transportation accounts for roughly two-thirds of all U.S. oil consumption; reducing oil imports only on the transportation end would require huge leaps in fuel economy. Would the lives saved in wars foregone outnumber the additional lives lost on the highway? Someone with mad math skills will have to figure that one out.

Here’s another wrinkle: If the U.S. reduced its oil consumption by (let’s say) half, then rather than simply omit Saudi Arabia and Iraq from its list of importing countries, it might cut its Canadian imports by half, its Saudi imports by half, its Mexican imports by half, and so on.

In that case, the only way to avoid the war-for-oil deaths altogether would be to eliminate oil imports almost entirely, by switching nearly all vehicles to electric power. That would jack up coal and nuclear generation by orders of magnitude. (Then again, perhaps if the U.S. imported only half as much oil from Saudi Arabia and Iraq, that would not have sufficed to justify war. Probably impossible to say.)

What about another consideration: the fatalities induced by air pollution? (Air pollution from vehicles causes lots of health problems—$56 billion worth in 2005, according to the National Academy of Sciences’ report "The Hidden Cost of Energy"—as well as crop damage and various other negative externalities. But since last week’s column addressed only vehicle fatalities due to CAFE standards—not injuries, lost productivity, and so on—let’s keep it simple.)

There’s no doubt improving fuel efficiency would reduce emissions and lower deaths. How much? Hard to say. A Harvard Center for Risk Analysis study claims more than 2,200 people died prematurely last year as a result of exposure to fine particulate matter from cars and trucks in big U.S. cities. The EPA and the Natural Resources Defense Council contend that the administration’s proposed goal—a 56.2 mph fleet average—would cut greenhouse gas emissions by 11.6 percent. Presumably other emissions, such as nitrogen oxides and sulfur dioxide, would shrink proportionately as well.

On the other hand, as the EPA’s Office of Transportation and Air Quality noted in a 2005 report, "cars are getting cleaner, but people are driving more." Indeed, higher fuel economy causes what is known as a rebound effect: On a per-mile basis, they make it less expensive to drive. So some of the gains from greater fuel efficiency are lost through induced demand. Besides, tighter standards would raise the cost of a new vehicle, inducing some people to keep their old clunkers longer. If reducing emissions is the goal, then raising the gasoline tax might be a more effective means.

Well, shoot. The goal of this column was to turn the chessboard around and play the black pieces. Reading it over, it seems I can’t help turning the board around again to play white after each black move. Apparently my mind wants to slam shut even when I’m consciously trying to keep it open. How ’bout yours?

Then again: Maybe, like Delingpole, I’m simply right about everything.

Nah.

A. Barton Hinkle is a columnist at the Richmond Times-Dispatch. This article originally appeared at the Richmond Times-Dispatch.



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