Gas Mileage Deception

The chart shows how much fuel is consumed over 15,000 miles by cars of different fuel efficiencies.
Source: http://www.sightline.org

You can do more for the environment by switching your Hummer for a Toyota Tacoma than you can by switching your Civic for a Prius. Does that make sense? It does, mathematically, because you are charting a function that is f(x) = 1/x, where 1 is your gallon or litre, and x is the miles/km’s per.

It sure does, because it’s the marginal impact of gasoline consumption that matters. So, trading in your Hummer for a Prius won’t mean a thing if you drive that Prius a billion miles. Some math is in order.

Let’s say your Hummer gets 16 mpg on combined highway/city driving, and your drive that thing 16,000 miles per year, spending $3.00 (US) per gallon.

16,000 miles/ 16 mpg x $3.00 per gallon = $3,000 annual gasoline bill.

Assume you are on a fixed salary, and $3,000 is your total annual gasoline budget.

Given a $3,000 annual gasoline budget, how many more miles per year can you drive with a Prius? The Prius gets 51-60 mpg, but many owners have disputed these figures, and thus a 43 mpg estimate is in order. Thus:

X/43 mpg x $3.00 per gallon = $3,000 annual gas bill.

X = 43,000 miles.

Jevon’s Paradox tells us that when we increase the efficiency of the use of a resource, we initially decrease the demand for that resource, but that ultimately this lower demand reduces price, which causes a “rebound” of increasing demand. When applied specifically to energy efficiency, this is commonly referred to as the “Rebound Effect.” LINK

If every car in North America were suddenly converted into a 43 mpg car, the demand for gasoline would evaporate. This translates into a lower price on gasoline, which implies our after-conversion price of $3.00 per gallon would be substantially lower. Thus, on $3,000 per year, we could travel even more than 43,000 miles, if we wanted to.

Given this rebound effect, if we all switched to higher fuel-efficiency cars, we would likely drive more. This means more traffic congestion, which translates into more idling, more fatalities, more accidents, etc. We’d probably get even fatter from driving everywhere, and would thus spend even more money carting our extra pounds around.

Let’s break down one little assumption. Going back to our little math problem, let’s say you are a genuine conservationist. You drive 16,000 miles in your Prius - the same as you would in your Hummer. Driving 16,000 miles, getting 43 mpg with a top estimated gas price equal to the old gas price ($3.00/gallon), you will cut your annual gas bill down to $1116.28 per year.

What do you do with that extra money? You probably won’t save it, and will instead spend it into the economy. If everyone does as you do, this translates into more goods being shipped. Transportation costs account for as little as 4-6% of the average goods bill, but, with lower fuel prices, the advantage coming from rail evaporates, which means you’ll have to share the road with more semi trucks.

The economy is not a static thing. Changing one aspect of it (in this case, fuel efficiency) will have far-reaching consequences, sort of like a giant game of Bubble Breaker - change one aspect of the game, and everything adapts towards a new equilibrium.