Study: U.S. Fuel Economy Rules 6X As Costly as Fuel Tax

The gasoline saved by upcoming U.S. fuel economy rules could be achieved for one-sixth and perhaps as little as one-fourteenth the cost by raising gasoline taxes instead, according to researchers at the Massachusetts Institute of Technology.

Their paper, published in this month's Energy Economics, points out that forcing new cars to deliver better fuel economy has no impact on the 230 million passenger vehicles already on the road in America. The analysis says substituting a higher fuel tax would provide immediate and direct incentive for drivers to reduce their fuel use.

The researchers, led by research scientist Valerie Karplus, suggest a bipartisan effort to increase the federal gasoline tax of 18.4 cents per gallon to 45 cents per gallon. They note that fuel taxes in Germany are 18 times as high as in the U.S.

The researchers estimate that U.S. fuel taxes currently raise about $25 billion per year. They say revenue from higher taxes could be used to improve America's highway infrastructure and even provide financial aid to low-income families help offset higher fuel costs.