The cost of green cars

A report in the NYT says that

while driving smaller and lighter cars saves fuel, “downsizing and down-weighting is also associated with an increase in deaths on the highway,” said Adrian Lund, the institute’s president.

“It’s a big effect — it’s not small,” he said

The test done was to crash a little car into a big car and see how the little car did. The answer, unsurprisingly, was badly. A little car is more fuel efficient than a big car so it’s better for the planet to drive one, and better for your wallet if carbon pricing ever happens. So the lesson I take from this test is that big cars are bad for the environment AND cause lots of deaths on the highway by crushing smaller cars in crashes.

Of course, individually it’s best to drive the big car, so an equilibrium is for everyone to drive big cars. Carbon pricing would do something about that, but it wouldn’t take into account the cost of the people killed. Should there be differences in road licencing charges between big and small cars to take account of that? I can’t really think of another mechanism by which the cost in lives is internalised. Lawsuits against people for driving big cars aren’t likely to succeed, and nobody’s going to get prosecuted for it if they kill a person.

  • It doesn’t seem quite right to say that it’s just the big cars causing lots of deaths. It’s the asymmetry in car size that does that. Driving a large car potentially imposes costs on other drivers, but that cost increases when other people choose to drive small cars. Isn’t driving a small car and getting killed because of it kind of like contributory negligence?

  • @Brad Taylor
    I absolutely agree: I was very lazy when I wrote that post. I think the difference imposes costs, but that the pareto optimal outcome is likely to be everyone driving small cars. That’s probably not an equilibrium, so regulation would be required to get there.

    I think what I said is true to the extent that driving a big car increases the probability of killing someone other than yourself. Whereas driving a smaller car than average only increases the chances that you will die. In that sense, driving a smaller car doesn’t carry the culpability that driving a bigger car does.

  • Isn’t the issue here that there are potentially multiple parteo ranked equilibrium – and if we believe that the “small car” equilibrium is superior then we will want to find some sort of mechanism to “nudge” the economy in that direction.

    That is the way the small car – large car game always rolled for me, as peoples choice of vehicle size are effectively strategic complements.

  • But why is the “small car” equilibrium superior? As driving a small car can get ME killed, and driving a big car may be bad for the plant but has little, if any, bad effect on me, I’m all for driving big cars. As everybody else should be as well. I don’t need a “nudge”, I need to stay alive.

  • @Paul Walker
    It’s superior because fewer people die and the planet is better off. It’s clearly not better from an individual perspective, though.

  • Moz

    Paul, the problem is that the optimum for the individual is to drive an armoured personnel carrier (effectively a tank with wheels). That way I’m resilient in the face of a whole range of threats. Albeit the cost to others is significant, not least because of the increased wear and tear on the roads. But at least I’m safe.

    If we internalise some of the externalities: the road user charges go up significantly, there’s a levy to cover losses in the areas where extra traffic reduces house prices and the ACC levy also covers health costs due to pollution and obesity. There are bound to be other costs I’ve missed.

    Then there’s “what’s best for society as a whole”, which includes things like the carbon cost and the loss of amenity due to replacement of nature parks with car parks.

  • Moz

    rauparaha, the planet is probably better off if more people die. Ideally they should die as early as possible.

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  • It’s not quite that simple – vehicles have a variety of uses and a wee car might be fine as a shopping basket but it’s not so comfortable/might not have sufficient space for longer journeys and most don’t cope with driving through paddocks.

  • @Paul Walker

    That is the essense of multiple pareto ranked eqm though – a small incentive for the individual can have a large aggregate influence, by influencing the choices of other agents.

    Now I didn’t say that the small car eqm was necessarily superior – I said if it was …

    An even easier explanation would be to say that there is a prisoners dilemma in the choice of a vehicle – but then I wouldn’t have got to use the phrase “multiple pareto ranked eqm”, which I enjoy using …

    @Homepaddock

    Indeed – it is more than a question of some “homogenous” version of saftey and the environment, there are also individual preferences to consider.

    As I said just above – I am not saying that the small car eqm is necessarily superior. However, it might be, and it is worth looking at.

  • @Moz

    Just a sec here – what is your welfare function? By planet do you mean inhabitants we won’t kill – or do parts of the plant also suffer from pains and benefit from pleasures?

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  • Moz

    Matt, I’m talking about the gaiaian view as much as the non-dead humans. But especially in the context of motoring, fewer people means fewer motorists and thus less congestion, so indeed, each death probably does benefit the surviving motorists. I do wonder if there’s a counter-pressure in that the survivors will disproportionately be in ever-larger vehicles.

    The gaiaian view is not necessarily from Peter Singer, merely assigning any value at all to the feelings of sentient animals means the net value of each human drops. Using numbers poses the obvious risk that since “God has an inordinate fondness for beetles” it’s likely that for each human we could have a great many smaller animals each feeling a tiny amount of pleasure, but the total exceeding that felt by the human they replace.

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  • medreas

    The problem with the [i]bigger car, safer car[/i] theory is that it promotes something of an arms race amongst motorists until we are all driving tanks (or rather hummers) which is not just placing a price on pollution and petrol demand but also the legacy of infrastructure (width of roads, garages, dynamics of car park buildings, off-street parking etc).

    And living in Auckland the last thing I would want is for a big hulk of a car to struggle to turn a right angle at a traffic light. It’s all about the speed off the mark..

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  • What would Hayek say

    Urgh – its a story of externalities, so why don’t we just price it and then leave people to decide knowing the tradeoff’s between size and accident damage. Lets not get all new age “nudge” about this, we already have good economic tools that can resolve the externality problem.

    Now what market based tool do we have that provides a price for human life – hmm that would be insurance.

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