Gas Still Too Cheap

NPR's Morning Edition had an interesting story this morning ("High Gas Prices Quietly Welcomed by Environmentalists") about whether gasoline consumption can be better curbed through regulation or through high prices (particularly a tax).  Economists feel that gasoline prices would need to double and remain there (i.e. $7-8/gallon) before behavior would really change, and advocate a gas tax to get us there.  The externalities (accidents, smog, global warming, etc.) are simply not reflected in the current price of gasoline. Environmentalists, however, feel that a gas tax is a complete political dead-horse, fearing that it would be extremely unpopular with most Americans, and advocated regulations requiring 40mpg automobiles (as exist in Europe).  Economists note that the 40 mpg averages in Europe exist, not because of regulation, but because of high prices (through taxes) that have existed for decades.   

Unfortunately, it seems unlikely that we are going to get better fuel efficiency (through either taxation or regulation) until we have leadership from either side of the aisle in Washington.

Note also another story on Morning Edition this morning concerning an organization in Indiana promoting car pooling by matching people up using a method similar to online dating ("Carpooling Best Sampled One Day Per Week").

Comments

[Summer]

I do not support taxing something to merely assist in the process of trying to get rid of it. However, the government has done this before.

I do agree that it will take consumer demand, corporate willingness, and true leadership (someone who will rise above the petty politics and lead the country, not worry about polls or keeping a section of the country happy) in order to get there.

Consumer demand is increasing and when the prices fall in a couple of years, that will mostly go away. However, it has started a series of reactions that will have a tremendous impact on our energy future anyway.

[Stephen Filler]

Summer,

Thanks for posting. Is there a specific problem with taxing to assist in getting rid of it? And if you are not in favor of taxing for this purpose, are there other effective mechanisms? Why is taxation a less preferred method?

Unfortunately, it's not just the polls or regional influence that supports the oil industry in Washington, but maybe mostly the insidious campaign contributions and cozy relationship between large oil interests and washington officials.

[Summer]

I think of such taxation as a tool of a tyrant and not something to be used as a club against something we do not like in a land that is supposed to have freedom. Not only that but it may also have a huge negative impact on the poor, who are less able to adapt to such things when compared to those better off.

Therefore, I like the drive of consumer demand even though it can bring about some changes at a snail's pace.

I think that we need more education out there about what is going on and how it impacts us today and tomorrow. That, combined with the random temporary spikes in energy cost, will help push us into a new energy economy.

Not to mention that we simply lack the infrastructure and a viable inexpensive solution to the problem at the moment. There is going to be something similar to a standard's war between different hybrids vs complete alternative energy turnovers. It will be expensive and it will drive new technologies and once over it will leave us with the beginning of the infrastructure needed to move us in a positive direction.

[Juno888]

I think that we need more education out there about what is going on and how it impacts us today and tomorrow. That, combined with the random temporary spikes in energy cost, will help push us into a new energy economy.