1: https://en.wikipedia.org/wiki/Corporate_average_fuel_economy...
1: https://en.wikipedia.org/wiki/Corporate_average_fuel_economy...
1. Poorer people tend to drive older vehicles, so if you solely encourage higher fuel economies by taxing carbon emissions, then the tax is (at least short-term) regressive.
2. You can work around #1 by applying incentives for manufacturers to make more efficient cars should lead any carbon tax
3. If you just reward companies based on fleet-average fuel economy without regard to vehicle size, then it would be rather bad for US car companies (who employ unionized workers) that historically make larger cars than Asian and European companies.
4. So the first thing done was to have a separate standard for passenger vehicles and light-trucks, but this resulted in minivans and SUVs being made in such a way as to get the light-truck rating
5. We then ended up with the size-based calculation we have today, but the formula is (IMO) overly punitive on small vehicles. Given that the formula was forward looking, it was almost certain to be wrong in one direction or the other, but it hasn't been updated.
TIL that US car companies won't make smaller cars in the face of different regulations, even though they made larger cars in response to current regulations.
The only way to avoid perversions is to tax the problem directly. The market will adjust to all proxies in unintended and harmful ways.
The only way to avoid perversions is to incentivize the things you want.
Taxing cigarettes led to vaping. Maybe less bad but still a nuisance.