For Instance: a popular SUV in Ireland is the Nissan Qashqai, which is selling very well with a 1.5L dCi diesel engine.

You wouldn't pull tree stumps with it, but it works very well in supermarket car parks.

I don't consider the popularity of SUV's in Europe to be good news. Its not just fuel consumption and global warming. The problem I see is this: Higher center of gravity in proportion to tread width means that if you take a curve too fast, you're likely to flip over rather than spin out. This means more fatalities or serious injuries.

With gas prices about twice those of the US, this sort of news should give people pause who think we can tax our way out of petroleum dependence.

The SUV's they're buying in Europe are not as big as the enormous SUV's that were once popular in the US. My understanding is that in the US, popularity of those monsters has been on the decline owing to ..... fuel prices! (whether due to taxation, hurricanes, oil company greed or whatever).

Also, European SUV's are largely Diesel powered, so again fuel consumption isn't the real concern.

As I said above: What worries me is SAFETY. From that standpoint I wouldn't want an SUV especially if it were small, owing to rollover considerations.

"With gas prices about twice those of the US, this sort of news should give people pause who think we can tax our way out of petroleum dependence."

High(er) gas prices incentivise people to buy more fuel-efficient cars. economics 101. but you have to bear in mind that many of the SUVs that I see around (in the UK) are things like the Land Rover Discovery, Porsche Cayenne, the Volvo XC90. These are expensive cars, costing up to or more than $100,000 so it is not poor people who are buying these cars, it is the affluent or rich. For them, they barely notice the cost of the extra fuel consumption versus say a standard saloon because they are so well-off; however for the rest of the population who are not millionaires the incentivising effect of gas taxes works.

High(er) gas prices incentivise people to buy more fuel-efficient cars. economics 101.

Price elasticity of demand, Econ 102

"Demands with an elasticity less than one in absolute value are inelastic; the demand is weakly responsive to price changes."

The real dollar price of oil is up around 300% over the past 10 years. Meanwhile, demand for petroleum in the United States has increased 9% during that period.

It doesn't get much less elastic than that.

If the demand for petroleum arose 9% during a ten year period in spite of higher prices, maybe that's due to population growth. More people = higher demand for automotive and air transportation, higher demand for food and fiber, and higher demand for petrochemicals.

If the demand for petroleum arose 9% during a ten year period in spite of higher prices, maybe that's due to population growth.

Population in the US grew maybe 10 or 11% from 1998-2006. So, to clarify, real dollar oil prices tripled and per capita demand didn't change over a 9 year period.

...really, the news are not good.
As I statet in another post, CO2 (and NOx) emissons of Diesel engines in cars are all in all inreasing due to the SUV boom in Europe. Here governments and auto-companies failed to come up with better ideas to do something clever for improving air quality and fighting GW.
Both groups recruit themself from provincial small minded accounting clerk backrounds. Sometimes, the customers come from an even worse backround.Thus, no wonder.

Some people say, it´s about preserving jobs in auto-industry. But why care? What happend to textil industry or mining? Is auto-industry something saint?

Every new car in production needs less hands at the assembly line. So, the people not needed anymore can be send back on the labour market. But why stem the tide?
With SUV´s? Polluting the enviroment? For what reason? Is this a new way of introducing communism? By auto-industry? I do not like this semi-communistic approach.

Following the development of the American, European and Asian markets, I am very pessimistic about any further progress in improving air quality in North American and European cities for the time to come. There is some potential left in Asia.

But why should I bother. Still I am not a asthmatic, no kid anymore and do not suffer a lung disease. I do not own a real estate behind a levee neither.
But! But maybe I have to pay my bargin for all the state´s expenditures connected to climate change and people´s health problems due to air pollution. I think, it´s going to be more money drawn off my bank account for these matters.
Is auto-industry and their share holders paying there part? Or are these people and companies tax free as some doubtlessly are?

Maybe we could begin therewith to put money aside through not building streets and maintaining them. Then, SUV´s would make scence, wouldn´t they? I know, it´s not a solution, again due to air pollution caused by these vehicles.

"Population in the US grew maybe 10 or 11% from 1998-2006. So, to clarify, real dollar oil prices tripled and per capita demand didn't change over a 9 year period."

to start with, they tripled from a very low base. I doubt there is anywhere in the world that has cheaper petrol prices than the US except for some OPEC members and states who subsidise fuel costs (in relation to the purchasing power of the domestic population). Also, not only did you have a substantial population increase, you also had robust economic growth over all of that period. these two factors alone would lead one to expect fuel consumption (absolute and per capita) would rise over the period; given the regressive policies of GWB regarding CAFE and tax breaks for HummVees etc it's absolutely astonishing that it did not.

http://economics.about.com/od/priceelasticityofdemand/a/gasoline_elast.htm

What's the Price Elasticity of Demand for Gasoline? (Hint: It isn't zero)

to start with, they tripled from a very low base. I doubt there is anywhere in the world that has cheaper petrol prices than the US except for some OPEC members and states who subsidise fuel costs (in relation to the purchasing power of the domestic population).

The oil price I used is the spot price for a barrel of oil. There is very little difference in price for that based on geography. It isn't the retail price of gasoline.

Also, not only did you have a substantial population increase, you also had robust economic growth over all of that period.

2.5% average annual real GDP growth is "robust"? Hardly.

these two factors alone would lead one to expect fuel consumption (absolute and per capita) would rise over the period; given the regressive policies of GWB regarding CAFE and tax breaks for HummVees etc it's absolutely astonishing that it did not.

Unfortunately for your hypothesis, those two factors alone aren't the only factors in the world. The basic issue is what price increases do to petroleum demand. Population will keep growing. So will the economy. So you can factor them out when considering whether fuel taxes are a smart approach to deal with curbing consumption. Normally, gasoline demand is almost completely inelastic in the short-term, yet less inelastic over the long term. I've given a 9-10 year period (medium- to long-term) of tripling prices, with very moderate economic growth and stagnation in median income for a high percentage of the population, and yet demand didn't go down. This isn't theory, this is fact.

What's the Price Elasticity of Demand for Gasoline? (Hint: It isn't zero)

I didn't say it was zero.

What's the Price Elasticity of Demand for Gasoline? (Hint: It isn't zero)

Actually, it IS perfectly inelastic up to two decimal points.

Per cap petroleum consumption, 1998 - 25.07
Per cap petroleum consumption, 2006 - 25.12

Real dollar price of oil, 1998 - 17.83
Real dollar price of oil, 2006 - 66.05

Ed = 0.000759663

Normally, that number is at least negative (especially with that degree of price increase). Elasticity numbers are expressed as absolute value, and the closer it is to zero, the more perfectly inelastic something is.

"2.5% average annual real GDP growth is "robust"? Hardly."

for large swathes of the developed world (Japan, the Eurozone) they would be very happy with 2.5% real growth p.a.

The US being such an extremely car-dependent country, we can probably expect the price elasticity of demand to be less there as people need their cars to get anywhere at all; in many cities in Europe and Japan it is much more feasible to get by without a car.

OK, so your position is that fuel taxes are not the answer; if one's goal is decreased fuel consumption, what is the optimal method? tightened CAFE standards?

I'd like to make ONE MORE post under this thread and then call it quits (until that is, another good Green Car Congress thread comes along):

An important reason why gasoline consumption has remained stubbornly high in the USA is, from 1981 onward the price of said commodity IN PROPORTION TO THE PRICE OF OTHER COMMODITIES (one of which is the cost of a car itself) actually declined.

Recently, with the explosion of gas prices to 3 dollars a gallon and beyond, we have seen a decrease in interest in unnecessarily massive sport utility vehicles. Interest in small cars has increased, but the naysayers are now making a big fuss about small cars being more dangerous in accidents.

You can't have it all.

for large swathes of the developed world (Japan, the Eurozone) they would be very happy with 2.5% real growth p.a.

Irrelevantand historically incorrect. 2.5% is mediocre for the US economy.

The US being such an extremely car-dependent country, we can probably expect the price elasticity of demand to be less there as people need their cars to get anywhere at all; in many cities in Europe and Japan it is much more feasible to get by without a car.

You're helping my argument.

OK, so your position is that fuel taxes are not the answer; if one's goal is decreased fuel consumption, what is the optimal method? tightened CAFE standards?

I didn't say it's not the answer, I just said that people should be realistic about what price increases for fuel does to demand, particularly in the United States. I've stated elsewhere that if one actually wants to limit demand, it's in the power of a government to do that without relying upon taxation.

FYI, but per capita GDP growth in Euro denomination for the EU15 was 1.7% per year from 1998-2006 and 1.8% per year for the US.

"Irrelevant and historically incorrect. 2.5% is mediocre for the US economy."

how exactly is it irrelevant? traditionally economic growth and fuel consumption growth have marched in lockstep, if this relationship has weakened or even broken this is very significant for what will happen in the future. whether in your personal (non-professional economist) opinion this does or does not constitute impressive growth by US standards is neither here nor there. I would also be interested to know how it is historically incorrect; I know for a fact Japanese policymakers would be ecstatic to have real growth of 2.5%pa.

"FYI, but per capita GDP growth in Euro denomination for the EU15 was 1.7% per year from 1998-2006 and 1.8% per year for the US."

doesn't rather prove my point that 2.5% is nothing to complain about?

An important reason why gasoline consumption has remained stubbornly high in the USA is, from 1981 onward the price of said commodity IN PROPORTION TO THE PRICE OF OTHER COMMODITIES (one of which is the cost of a car itself) actually declined. Recently, with the explosion of gas prices to 3 dollars a gallon and beyond, we have seen a decrease in interest in unnecessarily massive sport utility vehicles. Interest in small cars has increased, but the naysayers are now making a big fuss about small cars being more dangerous in accidents. You can't have it all.

From 1998 to 2006, sales of large SUVs in the US increased by 207%, large trucks increased by 63%, compared to sales of all light vehicles, which increased 30%.

By contrast, the price of gasoline (in 2006 dollars) in 1998 was $1.33. It was basically double that in 2006 -- $2.62.

doesn't rather prove my point that 2.5% is nothing to complain about?

Are you even reading what was said? That said that the US and EU15 rates of growth were essentially the same during the time period in question, ergo, your belief that the EU would be envious of US economic growth is unfounded.

GDP per capita growth rates

2007
Japan: 2.3%, EU15: 1.8%, US: 1.3%

2006
Japan: 3.0%, EU15: 2.1%, US: 1.8%

2005
Japan: 2.6%, US: 2.6%, EU15: 1.4%

People are treating the price elasticity of gasoline like a constant - which I would suggest it isn't.
It will be a curve.
At $1.33/gallon, gas is so cheap, it might as well be free. Even at $3.00 / gal, it is still cheap, so you don't see much reaction.
Push it to $5 or $6, and you will see it - over time.

Fueling a car is not like buying chocolate, if it takes $5 of gas to drive to work and back at $2.50/gal, it will take $10 to drive at $5/gallon.
You can's stop 1/2 way because of the cost, you have to keep going to work.
Until the time comes to buy a new car - then the cost plays a factor - so it might take 10 years to see the full effect.

This is why we drive smaller cars in Europe - we have had expensive fuel for decades.

Also, people are selfish - I have NEVER heard someone quoting an NOX figure for a car, but I often hear people quoting the mpg.
So people drive more economical cars (mainly diesel), and ignore the Nox.

People are treating the price elasticity of gasoline like a constant

I didn't say it was constant, merely gave real-world data for a sufficiently long period of time.

Push it to $5 or $6, and you will see it - over time.

You'll see some elasticity, but overall it will always be inelastic -- especially in the United States. It's all about the ease of substitution.

so it might take 10 years to see the full effect.

We have 10 years of experience and demand didn't move an inch.

This is why we drive smaller cars in Europe - we have had expensive fuel for decades.

That's not the only reason you drive smaller cars (eg, your cities and towns are older with more narrow streets), and Europe's actually instructive. How has fuel demand been the past decade in the EU15? Your hypothesis is that at a higher baseline price, that a given dollar amount will start to push sufficiently that demand will be less inelastic. Do the data support this for the time period in question?

Also, people are selfish - I have NEVER heard someone quoting an NOX figure for a car, but I often hear people quoting the mpg.

You've never heard someone quote an NOx figure on Green Car Congress? You sure about that?

So people drive more economical cars (mainly diesel), and ignore the Nox.

People drive what they're allowed to drive within whatever financial constraints they have. Some people care about emissions, many don't.

My point was that when gas was cheap, noone cares about economy. As it gets expensive, they start to care, and will switch to smaller / more economical cars - but this takes time as cars have a long life - so you won;t see it.
You havn't had expensive fuel in the US for 10 years - so you won't see it yet. They only went up in 2002 as far as I can see, so 5 years won't show the effect.

When I said I never hear people talking about NOx, I meant people I meet in the "real world". Obviously loads of people on GCC talk about it - but they are much more conscious of these things than the public at large.

My point was that when gas was cheap, noone cares about economy. As it gets expensive, they start to care, and will switch to smaller / more economical cars - but this takes time as cars have a long life - so you won;t see it. You havn't had expensive fuel in the US for 10 years - so you won't see it yet. They only went up in 2002 as far as I can see, so 5 years won't show the effect.

Nice theory. We'll see how it actually plays out. Since at $3 gas is still cheap by historical standards (relative to income), I'm not optimistic.