[microcolonel]

> Technology in cars can be rapid but seems to ignore those externalities

Many regulated risks in automobiles are not external, which is I think where they're out of bounds. I think a certain amount of regulation to ensure consumers are informed of the internal risks of an automobile is reasonable; but the government really oughtn't tell you how safe your car must be for you. Externalities, as you say, are the appropriate domain of regulation.

For some people, it may be preferable to have better fuel economy at a lower price (i.e. Honda can make the Honda Insight again) even if the operator risk is higher; but they should not be allowed to drive a vehicle without adequate stopping, acceleration, and speed, or one which poses excessive risk to fire and rescue workers, other motorists, or pedestrians, or has excessive emissions in their use case.

Right now, emissions regulations on automobiles focus on manufacturer fleet emissions (which is an unabashed pro-incumbent regulation), and emissions on a fixed test cycle; but this means you can pay for the privilege of being in the upper section of a fleet's emissions. Similar with the regulations on stopping speed, acceleration, and pedestrian safety: it seems to often depend on the class of vehicle, and so you can pay for the privilege of worse safety externalities.

[bumby]

I think the issue is one of pragmatism. CAFE standards are meant to be an average to allow some vehicles to be designed to meet very different end use needs. Same with the test beds. There's definitely room for improvement.

My point was that automotive manufacturers are not particularly incentivized to improve on areas that don't align with their bottom line. Are you advocating for more regulation in terms of performance parameters?

[microcolonel]

> Are you advocating for more regulation in terms of performance parameters?

I'm saying I'd prefer consistent (between vehicle classes) regulation of performance parameters which have externalities; and the abolition of non-normalized fleet-based targets (since they privilege the largest manufacturers). If the goal is to reduce external risk, the threshold of acceptable risk should be the same for all motorists as a matter of fairness.

A possible alternative to CAFE is a specialized cap and trade market. I get that they did think a bit about this stuff when they implemented it, but I feel like it has weird effects in practice, especially when gaming it enters medium-long term corporate strategy.

I think it would be spectacular if inefficiency was purchased on a per-vehicle or per-lot basis from manufacturers who exceed the target, and efficiency was sold in turn to those. Not sure how these transactions would be cleared, but I'm sure something reasonable could be worked out. This would do away with adjustments/exemptions based on vehicle footprint (CAFE targets currently differ based on mean vehicle footprint).

[bumby]

I think I agree in an idealized sense, but also think if this approach was taken it would decimate the ability to create certain vehicles, especially those used in heavy-duty applications. I don't know the history of CAFE standards but it may very well have been a practical choice...either get some form of progress or dig our heels in on an idealized version that never gets adopted.