[natedogg]

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Well, after you invent new products, there is significant cost to manufacturers to get them into production. Any product has to be mass-produced if it's going to be cheap, and consumers need a product to be cheap if they're going to buy it in large quantities. HDTVs are an example of a product that's beginning to achieve the manufacturing efficiencies necessary for truly mass consumption. DVD players did it a few years ago. The various incentives are designed to get the new fuel-efficient products over this hump and onto the market.

This won't cause any kind of disaster, any more than, say, cigarette taxes have caused disaster. It'll just help to spur quick adoption of new technology and incorporate the geostrategic and environmental externalities into the prices of vehicles.

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If the new technologies are economical and valued, they will succeed. Engineering the economy so that cars are built with some materials that a select few have decided are best is a stupid, stupid idea. Such manipulation can never be as efficient and effective as letting the market decide.

If gasoline continues to stay very expensive, the problem will solve itself. Fuel efficiency will come as a result of high gas prices. You don't need centrally planned incentives.

natedogg