54.5 MPG and The Law of Unintended Consequences

54.5 MPG and The Law of Unintended Consequences

Legislators and regulators need to observe a fundamental Golden Rule: Do not implement new laws if you have not considered or cannot control important unintended consequences.

A perfect example is the Obama Administration’s plan to increase new car mileage standards, from the currently legislated requirement of 35.5 miles per gallon by 2016 to 54.5 mpg by 2025, as an average across each automaker’s complete line of cars and light trucks.

Carmakers reluctantly agreed to the new requirements, to avoid even more onerous standards, or different standards in different states. But the deal does nothing to alter the harsh realities...