Is it Wise to Raise CAFE Standards?

On first blush, requiring car manufacturers to make vehicles get better gas mileage (the so-called CAFE standards) seems a no-brainer: It minimally restricts people's freedom while reducing air pollution and our dependence on Middle East oil.

But on second blush, I'm not so sure:

• If CAFE standards are raised, people will likely drive more thus emitting more exhaust because it's less expensive to drive: They'll spend less per mile on gas and the smaller high-gas-mileage cars (e.g., Toyota Corolla) cost less than larger cars (e.g., Toyota Camry.)
  
• Smaller cars have smaller engines, which have a shorter lifespan, which means more cars will sooner enter the landfills and require the building of more new cars, the creation of which is bad for the environment.
  
• Smaller cars are more dangerous--more people will die as a result.
  
• The new high-tech gizmos needed to improve gas mileage (for example, variable-interval valves) will cost the average buyer $1500 to $2500 more per car, which makes people less likely to buy a car, which will be yet one more nail in the U.S. automakers' coffin.
  
• And if people are still driving their old car, it's more likely to be a polluter, which will hurt air quality.
  

The lesson in all of this is that every time the government takes an action, there are likely enormous and often unanticipated side effects. In this case, I sense (and I don't think anyone can be sure,) that when the government restricts people's freedom to buy the vehicle they want and says that the government knows better than vehicle manufacturers how to make the right ones, when the smoke clears, we're, net net, worse off.