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Monday, December 1, 2008

The MPG Illusion in 2020

GPM shows that replacing the most inefficient cars (those with MPG in the teens) yields larger gas savings than improving already efficient cars. For example, convincing someone to trade in a 14 MPG car for a 20 MPG car reduces as much gas as having two people trade in a 33 MPG car for a 50 MPG car over the same distance.

Does the GPM argument apply only to today's highly inefficient cars? What if all cars in 2020 are "efficient" by 2009 standards (e.g., 50 MPG and above)? Is GPM still useful?

The answer is yes. Imagine that by 2020 cars range in MPG from 50 MPG (the Escalade superhybrid) to 170 MPG (the Prius superhybrid). GPM shows that the policy focus will always need to be on removing the most inefficient vehicles: Replacing a 50 MPG car with a 65 MPG car saves more gas (over a given distance) than replacing a 100 MPG car with a 170 MPG car.

Because of the curvilinear relationship between GPM and MPG, MPG will be potentially misleading even as cars become increasingly efficient. The benefits of thinking in terms of GPM will hold for all future efficiency levels, not just for today's SUVs.