As of Monday, the average price of gasoline in the U.S. was down to $2.22 a gallon, brushing up against $1.50 in some places. The price of oil was under $60/bbl.
When gas and oil prices fall, there are always two reactions: first, great lamentations that alternative and renewable energy investments no longer make economic sense, and second, wishes (upon a star) that America had the political chutzpah to impose a new gas tax.
Despite its appeal in some quarters, the gas tax is not a good idea. It costs enormous political capital and pays insufficient returns. If one had to be done and someone were willing to sail through the political sh*tstorm to do it, it ought to be like Troy Schneider suggests here -- revenue neutral, paid for with a reduction in payroll taxes. It would be a tidy, self-contained program, sheltering the revenue from pork-hungry hands; it would produce more of what we want (work) and less of what we don't (pollution). It's a good tweak.
What it will not do is significantly reduce the greenhouse gas emissions of the transportation sector. No reasonable price signal, on carbon generally or gasoline specifically, will do that. The solution is not more virtuous behavior or slightly more fuel economy, but new infrastructure.
To achieve the atmospheric carbon targets scientists urge upon us with increasing dread, emissions from transportation need to drop exponentially, not logarithmically.
Since the turn of the century we've seen the price of a barrel of oil rocket from $20 to well over $100 and now back down to $60. U.S. average gas prices have gone from under a buck per gallon to north of $4, only to plunge now to just over $2. In the midst of this kind of volatility and unpredictability, no gas or carbon tax with a chance of passing will send a price signal big enough to be decisive. As Joe Romm points out, it would take a carbon price of $400 per metric ton -- wildly higher than anything contemplated in developed world carbon markets -- to increase the price of gasoline by $1 a gallon.
Prices will push consumers to conserve, but that's almost beside the point. Cars and trucks aren't going to change in degree of fuel economy, via tweaks to wind resistance and fuel injection systems and commuting habits. They're going to change in kind. We'll soon find ourselves seeking the most rapid possible turnover of the fleet from gasoline vehicles to non-gasoline vehicles. Whether plug-in hybrids, biofuel vehicles, or hydrogen vehicles win out in the end (hint: it will be plug-ins), it will require new fueling infrastructure, either an enhanced electrical grid, biofuel stations, or hydrogen stations. We also need large-scale shifts to public transit and rail, more bike and pedestrian paths, and transit-oriented development.
In short, the changes we need in transportation are not something car companies or consumers can do on their own. What's needed is beyond new habits and new vehicles -- it's new infrastructure.
We need a transportation infrastructure for the 21st century. You don't get highways by raising the price of horses or bridges by raising the price of ferry boats. You don't get an electrical grid by raising the price of lamp oil. And you don't get a 21st century transportation infrastructure -- rail, transit, bike and pedestrian paths, grid, and PHVs -- by raising the price of gasoline. That's fiddling on the margins.
It's time to start thinking at the scale of the problem.
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Are you listening, Barack?
Tell that to the polar bears.
The www.carbontax.org has a pretty good collection of information on the impact of carbon dioxide emission fees. The site proposes a revenue neutral carbon tax that, while it would not be a revenue source, is a great alternative to the game-able cap and trade systems being proposed in congress.
A "gasoline tax" may be politically difficult, but a carbon tax targeting global warming issues could be made acceptable.
In the wake of the dramatic failure of private finance, we're rapidly moving in the direction of government becoming the predominant source of credit for the economy. The public is backstopping the risk of financing the private sector, and therefore the interest on this credit should be employed in the public interest: infrastructure, healthcare, education, job training, etc.
It's become clear that debt, although essential to the health of any economy, is a perilous risk to the public interest. By taking on debt, borrowers owe the government for the implicit risk of their indebtedness to the prosperity of the nation. The more aggressively the private sector pursues growth, the more it must pay as a hedge against the boom becoming a bust and as revenue for the stimulus to get the ball rolling again.
Yes, this would make credit more expensive, but as we've seen, in the long-run, cheap credit can end up costing our economy vastly more than expensive credit. Sort of like gasoline.
First thing that needs to be done is to raise the tax on gas so that it stays above $4.00 a gallon to force the auto companies and their idiot customers to buy economical small cars. If we do this and Detroit retools to build smaller cars we can also make freeway lanes narrower and make new lanes without making new freeways. There would be more room for parking, so on and so forth.
The money raised with gas tax could be used to build high speed trains on dedicated tracks going coast to coast along highways 10, 20, 40, 80, and north and south along side 5, 95 and through the middle of the country. This would provide jobs and ultimately stop our need to import oil.
If we only use our heads we can make an entire sane and prosperous nation.
If we let greed and self indulgents take over again it is back down tnto the sewer.
I have been through this before in the 70's and just as soon as the shortage disappeared so did the concern over conservation of resources.
2) We not only need a new infrastructure, but we need new ideas.... traditional rail won't work in a lot of places. We need to farm the idea out to Disney (or some comparable group accustomed to moving large numbers of people in a number of different ways.
By building smaller footprint alternatives (like really light rail: maybe the size of a roller coaster car) that can be dispatched as needed and may be light enough to share space with roads and sidewalks, we might even save money on construction.
It should also be a graduated tax based on the size of your vehicle and the estimated fuel usage of that vehicle. This way everyone who drives a vehicle pays a share of the tax. It doesn't matter how much you make or your social status, but on the vehicle you drive. Half of the monies collected should go towards road and bridge repairs and the other half towards New Energy solutions, whether that be solar, wind or electrical.
I remember the 70's extremely well. When you could only get your gasoline on even or odd days and the speed limit was 55mph. We apparently didn't learn our lesson from that time and if we don't step up and do something now we are going to be right back where we were, spending outrageous amounts of money on foreign fuel.
You are wrong. We need to implement an emissions tax of a $100 per ton of carbon dioxide, which is about $1 per gallon, to demonstrate that we do have the political will. Now is the time to do it!
1) It would send a clear signal that we have the political will to become energy independent
2) It would eliminate the need for a ridiculously complex(easy to game) cap and trade system.
3) It would generate about $600 billion per year, which would eliminate the deficit and leave about $100 billion and year to finance the development of the new energy efficient infrastructure.
Rather than revenue neutral, it should be a source of revenue and a demonstration of national will. It is way past time to stop sending $700 billion dollars a year, for oil, out of this country . We need to retain it here to invest in our infrastructure.
People are now desensitized to paying $3-4 per gallon.
The revenue generated could be put to good economic use rebuilding infrastructure, expanding/improving public transportation and green technologies.
All gas tax revenue would have to be mandated to be spent in the US, creating jobs and helping us out of the mess we are in.
Your primary argument against a gas tax seems to be that it won't be enough to stop climate change -- and I agree. We will still need other alternatives, wind, solar, etc. We'll still need to work on plugin hybrids and plugin electric vehicles.
But as you note, most of these transit alternatives require not just a new type of engine, but a new infrastructure. In other words, they're a BIG DEAL, and unlikely to take off overnight.
So why make the perfect the enemy of the good? Yes, ultimately we need to switch to a different method of transit. But in the meantime, where's the problem with using government's taxation power to nudge people in the direction of doing the right thing? We could improve -- not eliminate, but improve -- the environmental impact of all the car's we've built, and we could use the tax money for further future-thinking environmental/energy independence work.
Yes, it would require a lot of political capital to pas a gas tax, especially in today's economy -- you'd need to balance it out elsewhere; make it less convenient to drive, but more convenient to take public transportation.