Gas-Guzzling: China 1, USA 0

While the average fuel economy in the USA has been stagnant since 1987 (more details here) and General Motors, the biggest automaker in the world, is extending its "Employee's Discount" sale through September and will now cover "most" 2006 full size pickups and SUVs, China is going in the opposite direction: They are thinking about implementing a version of the "feebate" concept (tax "bads" and use that money to make "goods" less expensive). "The taxes would add as much as 27 percent to the price of vehicles with big engines, notably sports cars and SUVs, auto-industry officials and people advising the government on the plan said. At the same time, taxes may be cut slightly for models with the smallest, most efficient engines, though the details of these cuts are still under discussion. The taxes follow China's adoption on July 1 of fuel economy standards that are more stringent than those in force in the US."There is also a gas-guzzler tax in the US, but pretty much only sports cars like Ferraris are affected by it since SUVs – categorized as "light trucks" - are exempt from it. We are not saying that what China does is the only way to do things, but at least they are moving in the right direction and internalizing some of the environmental costs into the prices of gas-guzzling vehicles.

::Hefty taxes to be imposed on gas guzzlers in China