Toyota took time off from making Prius hybrids recently to criticize an energy bill passed by the Senate that boosts mile-per-gallon targets for new cars.

The Japanese automaker isn’t the only one griping about the Senate bill. The Cato Institute, a libertarian think tank, called it the “dumbest legislation of the year (so far).” The bill would force automakers to boost the average fuel economy of new cars, SUVs, and light trucks sold in the U.S. to 35 mpg by 2020. It is currently 27.5 mpg for cars and 22.2 mpg for SUVs and light trucks.

One aspect of the “dumbness” with which Cato takes issue is that the new standard would probably not reduce overall fuel consumption. If history is a guide, reducing fuel cost per mile will just encourage people to drive more miles. Backing up this view are the calculations of a Pennsylvania State economist who figures that higher CAFE (Corporate Average Fuel Economy) standards not only won’t cut fuel use but also would bring dirtier air. He estimates that a 50% increase in CAFE would bump up by a few percent the total emissions of volatile organic compounds, nitrogen oxide, and carbon monoxide.

Getting back to Toyota, the carmaker’s complaint with the Senate Bill has nothing to do with pollution. Toyota wants to keep selling big vehicles in the U.S., which would only be possible with looser CAFE standards. That’s because Toyota doesn’t make much from the small cars it sells. On the Prius, it makes nothing. So profits from Tundras and Land Cruisers subsidize the sales of its most fuel-efficient vehicles.

As you might suspect, the green movement doesn’t think much of Toyota’s CAFE logic. Even a Pulitzer- Prize-winning N.Y. Times columnist has dumped on the automaker for making “green” vehicles on one hand and lobbying for more fuel efficiency latitude on the other.

But Toyota’s detractors seem to be ignoring a few facts. There has been no shortage of highmpg vehicles, even disregarding hybrid technology. If you want something that handily beats the Senate’s CAFE levels of 2020, feel free to go out and get a ’97 Geo Metro (44 city/49 highway), an ’05 VW Beetle (38/46), or an ’04 Honda Civic (47/48). These cars haven’t exactly been top sellers, another reason why Toyota wants to market bigger vehicles. It, like other auto companies in the U.S. market, is trying to deliver what consumers want.

Many proponents of stringent CAFE levels also advocate superhigh fuel taxes as a way to get more of us driving Geo Metros. They argue that steep taxes would stimulate work on fuel efficiency.

This is a case of be careful what you wish for. High fuel taxes in Europe haven’t spawned superfuel- efficient technologies there. And fuel-tax advocates seem to forget that virtually every piece of food we eat and every item in our houses, offices, and factories gets carted cross country by gas or diesel fuel-burning trucks. Any fuel tax these vehicles pay gets passed on to consumers. True, we probably won’t be driving bigger vehicles from Toyota. We won’t be able to afford them.

— Leland Teschler, Editor