In a recent policy piece in Science Magazine titled The MPG Illusion, Richard Larrick and Jack Soll bring up the issue of how the basic way we visualize fuel efficiency -- in terms of miles per gallon -- may mislead us into making incorrect choices when it comes to prioritizing changes we make in favor of more efficient vehicles.
In short, increases in fuel efficiency among low efficiency vehicles have a much more dramatic effect than increases in fuel efficiency among higher efficiency vehicles. Consider this excerpt from the article:
To illustrate these issues, consider the criticism that has been directed at adding hybrid engines to sport utility vehicles (SUVs). In a New York Times Op-Ed column, an automotive expert (4) has said that hybrid cars are like "fat-free desserts"--they "can make people feel as if they're doing something good, even when they're doing nothing special at all." The writer questions the logic of granting tax incentives to buyers of "a hypothetical hybrid Dodge Durango that gets 14 miles per gallon instead of 12 thanks to its second, electric power source" but not to a "buyer of a conventional, gasoline-powered Honda Civic that gets 40 miles per gallon." The basic argument is correct: The environment would benefit most if all consumers purchased highly efficient cars that get 40 MPG, not 14, and incentives should be tied to achieving such efficiency. An implicit premise in the example, however, is that an improvement from 12 to 14 MPG is negligible. However, the 2 MPG improvement is actually a significant one in terms of reduction in gas consumption... A car that gets 12 MPG consumes 833 gallons to cover that distance (10,000/12); a car that gets 14 MPG consumes 714 gallons (10,000/14). The roughly 120-gallon reduction in fuel used is larger than the reduction achieved by replacing a car that gets 28 MPG with a car that gets 40 MPG over that distance.
This isn't just an abstract concern -- studies with American consumers back the idea that by cleaving to the MPG standard, we confuse ourselves about what constitutes real gains in efficiency. This has implications for upgrading vehicles as a response to resource limitation, both in the abstract ("Let's use less petroleum") and in the personal and specific ("How 'bout I spend less money on gas for my next car").
In other words, make your van more efficient before you make your car more efficient, if you have to choose. And, if you're mandating efficiency via legislation, focus on the low end first, because it's where the largest gains can be made.
You can also hear an interview with the authors on the June 20, 2008 Science Magazine podcast.