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MARKET COMMENT * USA - Truckers are stockpiling dirty diesel engines
In 2007, new EPA regulations that mandate cleaner diesel engines took effect
Nashville, TN,USA -Management R&D -October 3, 2007: -- ... The new engines will reduce particle emissions by up to 98% over the previous generation and cut Nitrogen-oxide emissions in half... But the new engines increase the cost of trucks by $12,000, or about 10%... In addition, truckers (consumers of the new engines) anticipate higher maintenance costs and worse fuel mileage.Predictably, the new regulations have caused a big increase in demand for 2006 engines and trucks... For policy makers, this points out yet another disadvantage of a command-and-control approach to clean air. Mandates from Washington have to be phased in, and this gives consumers an incentive to stockpile old, cheap, but dirty engines so they can use them in the future. Instead of telling producers what to produce, or consumers what to consume (by picking technologies, like ethanol, to subsidize), tax what you don't want (pollution) and let the market decide how best to reduce it...
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posted by Unknown @ 8:10 AM
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