It’s Time for Another Look at Feebates

A common refrain in recent years has been that, while there are many fuel-efficient models on the market, most consumers persist in their love of gas guzzlers. Once manufacturers are making a full range of appealing high-mpg vehicles so that everyone can choose efficiency without compromising other features they’re seeking, things will change. We’ll see about that.

In the meantime, though, the matter of consumer vehicle choice does need some attention.

The fuel economy standards shaping up for 2025 will rely heavily on incremental advances in gasoline vehicles and will not require the sale of large numbers of electric vehicles. But it does seem clear that hybrids in particular will need to become truly mainstream to take fleet average efficiency where it needs to go.

With gasoline prices still keeping consumers guessing and the economic recovery painfully slow, another shot in the arm for advanced vehicles would be very helpful to reach the product maturity and sales volumes that will bring prices down.

But Congress is unlikely to look kindly on broad-based tax credits for efficient vehicles during the wrenching budget battles coming up.

It’s time to have another look at a revenue-neutral ‘feebate’ that would provide a rebate or charge a fee to new car buyers, depending on how far the vehicle purchased exceeds or falls short of a certain reference fuel economy.

Feebates have been pitched as a good way to keep fuel economy moving upwards when standards are stalled. But now, they could provide a source of funding for incentives to promote sales of highly efficient vehicles, while helping to align consumer preferences with the new crop of vehicles that will be entering the market in the coming decade.


Therese Langer is Transportation Program Director of the American Council for an Energy-Efficient Economy,