no incentive for fuel economy

http://www.theglobeandmail.com/globe-drive/new-cars/auto-news/are-consumers-to-blame-for-stagnation-in-fuel-economy/article2340647/

“I find little fault with the auto manufacturers, because there has been no incentive to put technologies into overall fuel economy,” says Knittel. “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 per cent when adjusted for inflation.

Aha, so it’s cheap gas that’s to blame. Yes. And gas is cheap, notes Knittel, because politicians are too cowardly – not his exact word, but mine – to take the one, foolproof and overwhelmingly simple route to nailing down outstanding fleet-wide fuel economy and the lower tailpipe emissions that come with it: raise fuel taxes. Want to suppress demand for gas guzzlers? Make them prohibitively expensive to drive.

“It’s the policymakers’ responsibility to create a structure that leads to these (fuel-saving) technologies being put toward fuel economy” rather than building the bigger, faster, more powerful vehicles consumers will buy if fuel is cheap, he says.

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D - funny. The gov't is forcing fuel efficiency standards that consumers don't care about. They don't care since the actual cost of gasoline (and driving cars) is not built into the price at the pump. The cost of oil rig-to- atmosphere is not built in.
We would not need big-gov't regulation of vehicle standard if we had smaller-gov't 'incorporated negative externalities' in the gasoline price in the first place. Ditto the health cost of accident due to cars in the car price.
But in the absence of this Mills-ian tweaking of supply and demand via this reality-based 'sin tax' in the gas/car pricing, we need the much more onerous and heavy-handed car MPG standards.

Over the course of a car's lifetime, the new fuel efficiency standards typically pay for themselves TWICE over. But this seems negligible and distant to a new car buyer.

See my earlier blogs on the real cost of cars.