European Union Central Planners And The Automotive Industry

Tougher Average Fleet Fuel Regulations In Europe

Today (6/26/2013), I read that the European Union are discussing more stringent average fleet fuel efficiency regulations for automobiles (See e.g. here, here). For brevity sake, I will not go into any details of the new regulations.

Like the CAFE regulations in USA since 1975, the European Union is acting like a central planner to resolve a non issue. Any environmental justification is most likely a red herring.

Unconstitutional Expropriation

Such regulations are akin to the government resorting to eminent domain. Property rights of automobile manufacturers are trampled.

Government Industrial Policies

This is a massive government intervention into the workings of the free market. Government undertakes to structure an entire industry and to interfere with business decisions.

Such massive regulations are a considerable constraint on innovation.

Government Mandated Rationing

Don’t be fooled! That is what it is! Consumer will needlessly and invariably have to pay more for future vehicles. Consumers will have less of a choice.

Non-Tariff Trade Protectionism

Average fleet fuel efficiency regulations are nothing but measures of non-tariff trade protectionism. I hope, the developing countries or other OECD countries will finally wake up and fight these regulations.

These regulations are designed to substitute foreign imports of vehicles to domestic production of vehicles. If I was the owner/principal of an Indian car company I would sue the European Union and the US.

Proposal For A Solution

Why does government not limit itself to funding basic research into e.g. bacteria that can split carbon dioxide into oxygen and stay out of the way to meddle with businesses and consumers?