The Case for Higher Gas Taxes (and Lower Income Taxes)
Posted by Robert Rapier on December 15, 2008 - 10:46am
Taxes and Choice
Whenever I mention the idea of increasing gas taxes, some inevitably hear only half the message: A tax increase. They don't want to know about any tradeoffs I propose, or if there might be a long-term benefit. They just know one thing: Tax increases are bad.
But I don't want to increase taxes. I don’t like to pay taxes any more than anyone else does. I don't feel like a patriot when I write a check to the IRS. No, what I am going to propose would give you more choice in the taxes you pay. I want to change the way you pay taxes in a way that will benefit future generations and reduce our dependence on foreign oil.
Don’t get me wrong. I understand the benefit of taxes. I recognize that a good bit of my tax dollars are well spent. I am happy to pay taxes that help improve our overall quality of life, or that secure a better future for our children. I just wish I had more control over the taxes I pay.
This attitude explains why I have always been a fan of lotteries. People can choose to buy a lottery ticket, and a portion of the proceeds goes into the tax coffers. But I can choose not to buy a lottery ticket. I feel the same about taxes on alcohol and cigarettes. I can choose not to drink or smoke, or I can drink and smoke a lot, and voluntarily pay more taxes.
Why We Need Higher Gasoline Taxes
The same logic holds for certain other consumption taxes, such as gasoline taxes. I can choose to use less, and the higher the price, the greater my incentive to make that choice. If the price is low, so is the incentive to conserve.
I think most can agree that in the U.S., a lot of gasoline usage is discretionary. We don’t treat our fossil fuel endowment as something that our children and grandchildren might need. We seem to be content to burn through it and keep our fingers crossed that there is a solution right around the corner for future generations. This is exactly the sort of "spend now, pay later" mentality that has gotten us into such a financial mess.
But what if you knew that there was a solution just around the corner for our fossil fuel dependence? What if you knew that unless we scale back consumption, your children and grandchildren will have to make far greater sacrifices? I think I speak for most parents when I say that I am willing to voluntarily sacrifice if it enhances the odds that my kids will have a brighter future.
This forms the basis of my support for higher gasoline taxes. In my opinion, a small sacrifice today will stretch our fossil fuel endowment and buy more time for sustainable alternatives to emerge. The advantages of having a higher gasoline tax, or more generally a fossil fuel tax, would be many in my opinion. They include:
• It would lead to conservation, which would help preserve our remaining fossil fuel endowment.
• It would encourage mass transit (people flocked to mass transit this year as prices climbed).
• It would make alternative energy candidates more competitive with fossil fuels, without picking specific technology winners.
• It would enable people to do a better job of planning ahead, as opposed to the constant expectation that low gas prices are right around the corner.
• It should encourage more efficient city planning, and rein in some of the suburban sprawl.
• It would make the price of fossil fuels more reflective of the negative externalities that are not currently priced in (air pollution, military expenditures, etc.).
• It would penalize alternative energy sources with low energy returns, and reward those processes that minimize fossil fuel inputs.
Political Palatability
But I don't want to just give the government more money in the form of higher taxes, and therein lies the catch with my proposal.
The most often cited disadvantage is that higher gas taxes are regressive; that they would hurt lower-income workers the most. That's a fair criticism, but we can address it. Let's consider some rough numbers for illustration (assuming only a gasoline tax). The average family consumes almost 2,000 gallons of gasoline a year (per the EIA, gasoline consumption in 2007 was 142 billion gallons for a U.S. population of 300 million people). If we phased in a federal gasoline tax increase of $0.20/gallon this year, $0.30/gallon next year, and then $0.50/gallon in each of the three following years, the total tax increase would be $2.00/gallon. Such an increase would still put gasoline prices at less than they are in Europe, but should encourage serious conservation measures, while at the same time allowing people time to plan for the tax increase.
But what about the additional tax burden of $4,000 on the average family? In order to offset the burden of these higher taxes, I would propose that as a part of the package we lower tax rates, or offer a tax credit equivalent to the increased tax burden for the average American. This is equivalent to $400 in the first year of the tax, and $4,000 by the time the last increase is phased in. Families that use less gasoline than the average should actually see their overall tax burden decrease. Those who consume more than 2,000 gallons per year will see an overall increase in their tax burden - and will therefore have a stronger incentive to reduce their fuel consumption. For those whose fuel usage is for farm or business use, the fuel taxes could be deducted against business income.
The price spikes over the past year have highlighted just how vulnerable our fossil fuel dependence has made us. We are dependent on certain regimes that are hostile to our interests. It is only a matter of time before energy prices go back up, and vast amounts of money start once again flowing out of our economy and toward those hostile regimes.
If we are to start working toward a solution to our fossil fuel dependence, we must first accept personal responsibility for our own energy consumption. We need to shed the belief that we are going to run this country on ethanol or biodiesel. It simply can't be done at our current levels of energy usage. In the U.S., we currently import over 10 million barrels of crude oil a day (and finished products over and above that). That is over 12 barrels of oil imported each year for every man, woman, and child in this country. We need to--as a first step--bring our energy consumption more in line with that of the EU. By doing this, we have a realistic chance of (temporarily) reaching energy independence.
The intent is not to increase net tax revenues, but rather to discourage excessive consumption. This is a practical measure to address our fossil fuel dependence. We saw the impact high prices have had over the past year. People started to embrace mass transit, conservation, and higher fuel efficiency. Many had no choice, as higher prices devastated personal budgets. Without a doubt, people responded to higher fuel prices.
We need to have better forward planning around fuel prices, or the next round of price spikes will see more failures in the airline and auto industry, and will once again play havoc with personal budgets. But as long as politicians keep promising low gas prices, some people will avoid making choices to lower their energy consumption. The surest way to encourage people to move toward lower energy consumption is to let them know-–with certainty-–that higher prices are on the way.
I close by reiterating that I am not proposing a net increase in taxes, nor am I proposing bigger government. But when I pay taxes, I would rather be taxed on my consumption--which I can choose to reduce. Because of the need to reduce our fossil fuel dependence and save some of our fossil fuel supplies for future generations, this certainly seems like a no-brainer to me. Yet I am not the first to propose such a scheme, which leads me to believe that our political leaders lack the collective courage to tackle this controversial issue.
Here's hoping with a new administration, the response is a sincere "Yes we can!"
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I wouldn't hold my breath.
"President-elect tells Americans 'help is on the way.'
http://money.cnn.com/2008/11/26/news/economy/Volcker/
The US will be assisting the domestic suto industry, not cutting its lifeblood:
http://www.nytimes.com/2008/12/13/business/13auto.html?_r=5&ref=business
http://www.factcheck.org/elections-2008/obamas_oil_spill.html
Obama is on record supporting the auto industry.
Great idea, but it won't happen with this administration. Just more business as usual; meet the new boss, same as the old one.
Just more business as usual; meet the new boss, same as the old one.
It makes even less sense to expect changes in basic human behavior based on price alone.
Have you ever seen an obese person pass up a chance to pay more for a Big Mac or Whopper when they could have chosen a salad and paid less?
Fat chance!
Yet Robert expects a few dollars here and there will "discourage excessive consumption".
Just as an overweight person can only lose weight by reducing or rationing calories, our society will only make meaningful reductions in fuel consumption when fuel availability is restricted.
How to mitigate peak oil
1) Compulsory education in High school and University on NET energy. 101 Energy and Thermodynamics.
2) Compulsory education about fertilizer. NPK 101, textbook by author Bob Shaw (Totoneila). Have you hugged your bag of NPK today?
3) Increase Efficiency across the board through strict regulation.
4) Raise consumption taxes of items that require more energy to produce through the roof. Items should be priced according to the energy they use!
5) Raise Gas taxes globally (Sure it'll guarantee a depression but do you want a depression now or a global collapse later?)
6) Make it patriotic to use less energy, to use less in general! Society should reward less.If women rewarded less, men would oblige with using less. The mess that got the world into this in the first place is competition for mates.
7) Use the taxes gathered to create a sovereign alternative energy fund and keep Robert Rapier and Nate Hagens in charge.
8) Invest in comprehensive public transport
9) Trains
10) Cut the working week to four days. Less time and energy wasted in commuting.
VK;
I appreciate the intent here, but the tone of all your suggestions comes off as some form of 'combative policy solution' It sounds like it's just gunnin' for a protracted congressional and cultural battle, of which we've seen so much already.
I think the strength in RR's proposal is that while focused and clearly directed, it is also proportional and gradual. The way you've worded some of those sounds like you're telling consumers and citizens that the 'they' in the economy is the enemy, not that we need to all join in an effort to improve our priorities.
"Compulsory, Compulsory, Tax high energy items Through the Roof"
In a time of extremes,sometimes 'Diplomacy and a Conciliatory approach' are regarded as ineffectual, weak or even a betrayal. Nobody wants to compromise.. and we don't get anywhere. Push too hard and it only inspires resistance.
Best,
Bob Fiske
Robert,
Your estimate of per family gasoline usage is too high.
US census says there were 105 million "households" in 2000.
http://quickfacts.census.gov/qfd/states/00000.html
I suppose there are a few more in 2008.
Allowing for commercial gasoline use--average household (family?) use is probably less than 1400 gallins per year.
To return the tax, a credit must be used. Something close to half of US households pay no income tax. Many pay SS/Medicare but no income tax.
I think your idea has merit, but I don't see how you can sell it politically. Any ideas on how to convince Americans this is a sensible move?
Paul in Nevada
Your estimate of per family gasoline usage is too high.
I had two or three different numbers from various sources, but in the end just decided to make it simple and stress that this was just a rough calculation.
Would I tax diesel? No, at least not initially. Diesel engines are more efficient than gasoline engines, so I would first encourage people to move in that direction. Plus, if you taxed diesel, there would be a large business contingent that would be staunchly opposed.
I would like to see something get passed, and I think the chances go way down if you throw diesel into the mix. The other thing is that relative to gasoline, the market is a lot smaller, so it isn't worth losing support over.
Robert,
I disagree in that higher prices for all users of oil would induce conservation evenly. Diesel is in short supply world wide as we are already experiencing shortages as users switch to diesel over gasoline. A tax on jet fuel would seem to be a requirement too, since there is usually a choice between flying and driving, even on long trips. I've driven across the U.S. a couple of times because I could not afford the cost of an airplane ticket plus car rental. I've driven to Canada twice for the same reason.
To echo another poster, since the goal is to reduce consumption, not punish the user or one market segment over another, I think that rationing is a better approach. The main reason for this is that I think an increase in the price of gasoline, either due to market conditions or due to taxes, tends to produce other price increases as businesses pass along their costs in their wholesale prices. Also, in our present economy where about 70% of the economy is consumer oriented, increases at the pump tend to damp down other purchases as consumers may simply pay the higher price and continue to drive. To have the desired impact on the consumer, the price at the pump would need to increase faster than inflation and we've already seen large price increases in the early 1980's which resulted from increases in world oil prices.
Rationing is a better approach, especially a system where the allocations could be traded. Then, those who wanted to consume more than their allotment could purchase what they need, but with a higher price as the market adjusted to the need for the extra consumption. That would work like a progressive tax on the folks who wanted to continue to be "gas hogs" and would certainly give them a greater incentive to cut their usage. Rationing would produce less inflationary pressure, while achieving the desired reductions. It would also give an immediate signal to the entire economy that we are living in a different world from here on.
As the availability of imports is likely to become sharply constrained (Jeffery Brown's ELM, for example), the tax on gasoline would need to rise to very high levels, much above that which you suggest. If the U.S. had added a larger gasoline tax after 1974, then increased it again after 1980 and increased it further such that we were ALREADY PAYING $2 per gallon in Federal tax, things would be different. It's too late, IMHO, to begin a stiff new tax, given that post Peak declines will likely result in a continuing upward trend in world oil prices. Adding a tax on top of the price increases we saw last summer would immediately sink the rest of the economy. Reducing other taxes to offset the oil tax would remove an incentive to conserve for many, just as the old income credit for gas taxes did in the 1960's. As time passes and the need to reduce consumption becomes more urgent, there would not be enough income taxes left to cut as further increases in gas tax caused the pump price to spiral ever higher.
About the only good result I can see from increasing the tax on gasoline would be that rationing might be seen as a more desirable alternative among the political class. Either way, it's going to be next to impossible to push either plan past our congress critters...
E. Swanson
I agree that rationing is a better way to go. Just look at how much the price had to rise just to get a less than 7% cut in consumption. Rationing gaurantees that total consumption would go down while still supplying fuel for vital needs like food production and distribution, local government services, infrastructure improvements, etc. The ability to trade my unused rations with my neighbors at a mutually agreed price means retirees like me could actually enjoy a small economic benefit.
Sorry, you're wrong on most points.
A simple revenue-neutral shift of taxes from income (via a refundable credit) to fuel hands people a bunch of money that they can spend on fuel (directly or indirectly) or on something else. People with unusual circumstances can be given additional credits, but this doesn't carry the baggage of a currency. But best of all, the tax creates an extra incentive to avoid burning each and every gallon of fuel, starting with the first one, and "pays" the consumer the full pump price; selling a ration coupon only yields a fraction as much.
I disagree.
What's the point of increasing a tax and then refunding an amount equal to the tax? Is the consumer to be given a fixed amount or an amount exactly equal to their individual tax? A fixed amount looks like a transfer or welfare payment for the poor, who wouldn't be expected to buy enough fuel to amount to the refund while the more well to do would pay more tax than their refund. We know that the rich would hit the ceiling, especially if all transport fuels were taxed, which must happen to keep folks from shifting from cars to aircraft, etc. And, I see nothing wrong with using a BTU based system of value, which wouldn't be subject to inflation. The idea of an energy theory of money has been around for decades, but the economists can't accept it.
Anyway, if the tax is to work, it must have some "bite", that is, it must hurt enough so that people really do conserve. Your plan would appear to have no net impact on the small consumer, as they would be assured of receiving that refund later.
I've previously suggested that a stiff fuel tax might be used to pay for about half of the U.S. DOD budget, including the "war on terrorism" PR crap. I would not rebate the tax but would increase the standard deduction to offset the income. I think this might provide an extra incentive to reduce our imperial military system as our empire contracts for lack of fuel...
E. Swanson
How about a "War on Energy"? We could harness underground atomic explosions and maybe monsters like Godzilla on treadmills to produce unlimited amounts of jobs for Beltway insiders. Or maybe use cosmic rays to tow dwarf stars into tractor orbits around the moon where they can be enclosed in safe housing and transmit effectively unlimited amounts of clean microwave energy directly into people's toasters? Firing off missiles in random directions will produce much more energy than anybody can reasonably use, even North Americans. It's a wonder CERA hasn't picked up this highly concentrated form of pure energy in its confabulations.
Seriously, anybody else wondering how the heck a trillion plus dollars can actually produce any real economic return? Doesn't EROEI have more general application? Pumping cash in won't produce much usable product out of a structurally deficient economy. The natural analogy is the war economy. Dig that hole, fill it with casualties and wreckage, then fill it up again. "WOE" is a natural extension of "drill, baby, drill". Its a gas, gas, gas...
What's the point of having Social Security and the EITC? It appears you understand neither.
Ah, so you do get it!
Yes, a fixed amount would give a net surplus to people who use little fuel (which includes those with little income). This would be a temporary measure which would vanish naturally over time as petroleum usage (the basis of the tax) shrank. It would also serve to compensate for the initial flow of fuel-saving technology into the upper price segment of vehicles, which would take some years to filter down to both lower-priced new vehicles and the used-vehicle market.
After 20 years or so you could taper off the rebates and just use taxes as a disincentive to use petroleum, because relatively few people would be using much of it anyway.
Social Security is not the same as a fixed tax rebate. The amount one receives from SS is a function of how much one has earned over a career. If you are one of the lucky ones with a good job which pays more than the maximum contribution, then your return from SS won't be above the maximum, but, for many low income folks, SS payments can be less than the maximum. Worse, if one "retires" early and begins payments before the nominal age (67 for my generation), the payments will be lessened still further. That is certainly true for me as I look at my yearly SS payment statement.
Besides, it's likely that we don't have the luxury of a 20 year period to "taper off the rebates", given the Export Land problem. We had better have a large amount of alternatives to fossil fuels in place 20 years hence or you can kiss civilization goodbye as more and more people become so desperate that there will be shooting in the streets. Just today the local news tells us that there was a robbery in a nearby city in which a Brinks guard was shot dead as he carried sacks of money out of a retail store. The robber got away...
E. Swanson
Now you've proven that you understand nothing I've said, because the issue isn't Social Security benefits but Social Security taxes (which are regressive, but are generally larger than the per-taxpayer fuel rebate under most proposals).
Until you show that discussion with you isn't just arguing with a wall, I'm done.
Sorry, my one track engineering mind thought that we were discussing gasoline taxes and gas rationing. Sure, the SS taxes are "regressive" in that they hit the lowest income earners the hardest. But, that has little to do with a fuel tax that is rebated as the rebates would actually be progressive, i.e., the more fuel one uses, the greater the effective tax, since the rebate would be a fixed amount.
A rationing system with tradeable allotments would also be progressive, since the lower income earners and the unemployed would sell their excess allotments for cash. Again, those who wanted to consume more fuel than their allotment would pay extra to do so, resulting in a progressive "tax" on the gas gluttons...
E. Swanson
Tradeable allotments = parallel currency, problems noted above and still unaddressed by you.
Good bye, wall.
It's all about choice here- you are being handed a choice. For some consumers, the net outcome would indeed leave them coming out the same. For some, they would come out worse, but in the end- it was their choice (or in the instance of a fast and harsh set of tax increases, their past choices of location etc.).
For people like myself, young, employed, peak oil aware and who did not make the plunge into the housing bubble, I am now given the choice of where to live relative to my work, and how I get there. Since I sold my car, cut my electricity usage by 2/3rds, and completely cut out my natural gas usage- the tax burden I have in my current tax bracket would be greatly decreased. Is it my fault that I had to take a well paying job to support my high debt level to pursue a good education to get my high paying job (Well, maybe =) I certainly don't see how there is a net benefit to society to put everyone into debt, just to pay higher taxes on their income when they are trying to pay off that debt- when they could be happier and more efficient in a lower paying more fulfilling position.
Tax consumption, and there should also be a war tax put into the constitution, including any conflict initiated at the behest of the President- it would certainly make us think twice, and balance our budget. (There are too many problems to list I could go on and on).
Robert,
How would you treat diesel? Tax it as well?
Paul in Nevada
I would say, "Yes, why not?" We need to significantly change our consumption patterns, and transportation is one area that needs a complete rethink, which fuel taxes will cause most to do. We need to stop consuming so much fuel just moving items around the world. Relocalization is a major part of the solution.
The 1996 dedication issue of the Hubbert Center Newsletter included an item on gasoline taxes.
http://web.archive.org/web/20071030212804/http://hubbert.mines.edu/
Excellent article, Robert. I've seen similar versions of this solution, and I believe it is crucial to implement this as soon as possible. Some may object to the tax credits for those who don't pay taxes now, but if they can lead low-consumptive lifestyles that do not negatively impact the rest of us, then I'm all for taxing the wasteful lifestyles that do to reward the right actions.
One (truly minor) quibble;
For those whose fuel usage is for farm or business use, the fuel taxes could be deducted against business income.
If businesses knew that a tax would eat into their profits, then they would have to choose between restructuring to overcome or simply absorb the tax rise, raising their product/service cost. We need the "carbon-discouraging" tax rebate in order to push for improvements in all areas of our way of life. Agriculture might be given a delay in their taxes, but we still want to make improvements there as well. Do we want to support a) corporate farms halfway around the globe, or b) local farmers and people incentivized to grow their own gardens? I choose the latter set.
Under the existing tax system, wouldn't the total cost of fuel (including taxes) be deductible from a business' income already?
Or are you proposing a "tax credit" so that the farm doesn't even pay the fuel tax in the first place. If this is the case, I strongly disagree with the proposal. I think the best bang-for-the-buck of the fuel tax is when every consumer and business faces the same tax. There's not much sense cutting back on some personal driving but then buying high-energy farm produce.
I'm not convinced that corporate fuel rebates are needed, given the deductibility of fuel on corporate taxes, let's look at the options wrt rebates to businesses; Do we give all businesses the same rebate? Then Joe the Plumber would receive the same rebate as, say, Sears; not equitable. Do we rebate on gross income? Then a law or lobbyist firm might receive a huge rebate; again, not equitable. Would we base it on number of employees? That sounds the most reasonable of the alternatives so far. Other suggestions?
No rebates for businesses, period. No deduction as a business expense either. The tax on fuel is incorporated into the price of goods and services, helping to steer consumers toward less petroleum-intensive producers.
Yes Tax Gasoline. Make it revenue neutral or rail positive. Some of us have been saying it for awhile. http://www.theoildrum.com/node/3725#comment-315075
Use the Fed tax and rebate system.
Leave diesel alone for now. It is agriculture, transport, and commercial (not to mention military) and from the last spike a more critical shortage.
If you hand out an energy credit and then tell people gasoline is going up no matter what their hearts and minds (and habits) will likely follow.
If you leave diesel alone, why wouldn't people just shift to diesel vehicles with a $2/gal on gasoline? Diesel consumption goes up; gasoline consumption goes down?
Paul in Nevada
Hey Paul
It's our perculiar situation in the US. I don't forsee too much of an issue initially. Our refinery capacity favors gasoline and when demand/supply got tight it sent diesel prices over $5 anyway. Because of the credit crunch (which looks long term) new vehicle purchasing isn't a huge factor. There sure would be a resurge for old Mercedes. The efficiency is higher and a new crop of small diesels might not be so bad.
The real problem IMHO with diesel is agriculture and commerce and how not to cripple them being the 'essential' and gasoline being more the 'discretionary'. Politically it opens up two fronts. You could kick in something if the spread between gasoline and diesel became huge but I don't see it right away.
If the "Peak-Oilers" are right a gas tax probably won't be necessary. The price of gasoliine will bust us with, or without, any added taxes. It's, also, a very regressive tax.
I'd probably prefer something along the lines of strong tax breaks/rebates for people trading in gas-guzzlers for (or, purchasing in any manner) very fuel efficient vehicles.
Hey kdolliso
From the link that was hashed out extensively in the last two days some really savvy guys, Hirsch and Simmons, (who are both old conservative types) are scared to death of the market forces out there right now.
Investment and demand are sending exactly the wrong signals re peak oil and conservation.
Yep, push and pull at the same time. That's what we've been saying.
If I get say $1k or $2k as a break and you tell me that gasoline will be high. I can 'make' money by getting a bike, an electric bike, buy some bus fare, or increase my rail use.
We've got to power down, but we don't want to kill off all of the economy at once. If we favor rail, water transport, cycling, and TOD, then let's encourage folks to get out of their guzzlers and let them discover the alternatives that suit them best.
Hey, Xburb,
I'm going to get a lot of down-arrowies for this; but, what we're really going to do is produce, and use, a lot more biofuels. We're powering the equivalent of 20 Million Cars, approx., with ethanol, now, and we will in the next decade double (or, triple) this number. We will probably, also, figure out how to get more biodiesel in the mix.
This is the easy, and, hence, the most likely scenario. We can use existing cars, existing engines, and existing infrastructure. It's, really, the no-brainer.
Here we go . . . 1 . . . . 2 . . . . 3
I'm going to get a lot of down-arrowies for this;
As you should, because...
We're powering the equivalent of 20 Million Cars, approx., with ethanol, now,
That's incredibly misleading. You always conveniently overlook the fact that there is a lot of embedded fossil fuel energy in that ethanol. That fossil fuel energy could have fueled those cars directly. So what did ethanol net? I know that in your fantasies, where boilers are fueled with corn stover, that's a large fraction of the total. In the real world, where boilers are fueled with natural gas and tractors are fueled with diesel, it's a small fraction.
Whatever,
Ethanol uses some nat gas, but oil refineries don't.
Farm tractors use diesel (1 gal for approx 90 gallons produced,) but oil tankers, and oil rigs don't use bunker fuel, or diesel.
You want to use nat gas directly (despite the lack of infrastructure) but can't stand the thought of leveraging it with bio.
You just hate ethanol. Period. Doesn't matter. We're using a lot of it, and we're going to use a lot more. That's just the way it is.
Farm tractors use diesel (1 gal for approx 90 gallons produced,) but oil tankers, and oil rigs don't use bunker fuel, or diesel.
Your red herrings are noted. But it is interesting how those liquid fossil fuel inputs into ethanol production continue to dramatically decrease. A couple of years ago, we were hearing that it only took a gallon of diesel to make 6 or 7 gallons of ethanol. Now it's 90? Wow!
You want to use nat gas directly (despite the lack of infrastructure)
Somehow countries like Brazil, India, and Pakistan were all able to work through this infrastructure nightmare. But I guess we just can't pull that off. Better to develop an E85 infrastructure that also doesn't exist.
You just hate ethanol. Period.
As I have stated before, this will come as a VERY big surprise to some of the ethanol producers I work with. They will probably think I deserve an Oscar.
Brazil uses some nat gas for fleets, but 50% of their transportation is through Ethanol.
Pakistan, and India? Do we Really want to go there?
Okay, you just hate the ethanol manufactured by someone you don't "work" for. RR, I have, honestly, NEVER heard you say anything good about ethanol. Never.
Brazil uses some nat gas for fleets, but 50% of their transportation is through Ethanol.
Do you want to bet $10,000 on that? How about I put up $100,000, and you only have to put up $10,000? How about my house against $10,000 on your side? Are you confident enough in your claim to take me up on it?
Pakistan, and India? Do we Really want to go there?
Sure. Somehow countries like Pakistan and India could figure out a natural gas infrastructure. In the U.S., we simply don't have it and therefore must build an ethanol infrastructure.
RR, I have, honestly, NEVER heard you say anything good about ethanol. Never.
http://www.theoildrum.com/story/2006/10/10/171011/86
http://i-r-squared.blogspot.com/2006/06/e3-biofuels-responsible-ethanol....
http://i-r-squared.blogspot.com/2006/03/improving-prospects-for-grain-et...
Now, don't you feel silly? Got anything else? I am in Europe, and it is getting late.
Okay, then what are the numbers for Brazil?
No, I don't feel silly. I don't go to your website. Why would I go to the website of someone who obviously despises me?
Besides, those articles were written back in 2006. You haven't said anything positive about ethanol in over two years?
Is this really the best you have? You post propaganda, over and over. That's all it is. I have never posted anything good about ethanol? You see that this isn't the case. But when have you ever posted any doubts or concerns about ethanol? Show me that post.
I have absolutely nothing against ethanol as a fuel, and even recently explained to someone the relationship between higher compression ratios, ethanol, and the possibility of increased fuel efficiency. No, my problem isn't with ethanol. My problem is with smoke, mirrors, and propaganda.
Oh, and the real numbers for Brazil? Per the Brazilian transportation statistics, ethanol contributes about 17% by volume and 10% by energy content to transport in Brazil. Diesel is over 50% of the total. And Brazil has a natural gas fleet 8 times the size of ours in the U.S., despite Brazil's smaller population. They certainly don't waste their natural gas on ethanol production.
It's always entertaining to watch you debate our resident ethanol trolls...
ETHANOL FUEL IN BRAZIL - From Wikipedia
The success of "flex" vehicles, together with the mandatory E25 blend throughout the country, have allowed ethanol fuel consumption to achieve a 50% market share of the gasoline-powered fleet by February 2008.
You do understand that absolutely anyone can edit Wiki entries? I have seen industry shills do it on many occasions.
Again, feel free to take me up on my bet. But I won't be using Wiki to prove my point.
Link for Above
Your 10% number is for all energy used in Brazil. Not for "Transportation" energy. They burn biomass (bagasse) for process energy, just like a lot of US plants are starting to go toward gassification (biomass.)
Link for Above
Another Wiki link? Surprise. I got my information from the Brazilian government. If you haven't figured it out by now, 1). Wiki can be edited by anyone; 2). Controversial topics get edited heavily by people with competing interests; 3). The information can change daily.
Your 10% number is for all energy used in Brazil.
No, it isn't. Now if you have the courage of your convictions, take me up on my bet. Otherwise, feel free to continue with the propaganda.
Well, hows about a li'l linky-poo, then, big boy?
I am going to bed. If you decide to put propaganda to the test, let me know.
If you just want the information, per the Brazilian Ministry of Mines and Energy, the actual breakdown of vehicle fuels in Brazil by volume is 53.9% diesel, 26.2% gasoline, 17% ethanol and 2.9% natural gas.
The reason for your confusion is that although ethanol makes up a fair fraction of the gasoline/ethanol market [17/(26.2+17) is nearly 40%] the ethanol/gasoline market makes up less than 50% of the vehicle fuels market. If someone wanted to inflate the ethanol contribution, they ignore that latter bit.
I Gave a Link.
I suspect the reason you didn't is you've realized that your information is dated.
That said, they do use a lot of diesel as a result of carrying most of their cargo by truck. Virtually no Barge traffic, and very little railroad.
2.9% nat gas? chuckling
I stated 50% of their transportation was from ethanol. Transportation refers to humans driving. Always has. And, I was correct as my link bears out. Your numbers are out-dated.
Transportation refers to humans driving. Always has.
This is why it is clear that you are just posting propaganda. We already established that your link was to Wiki. Are you willing to hang your hat on that? I can go over there right now and change that number to anything I want. Then someone will notice, and change it to whatever they want. You could stick that number in yourself. As I said, when the topic is controversial, the numbers get changed a lot - and can't be trusted. That's just one reason why Wiki doesn't get used as a source in the scientific literature.
And, I was correct as my link bears out.
You weren't correct, and I explained why you are confused on the 50% claim. But I am just waiting to see if you are foolish enough to bet me. As I said, I won't be using Wiki to argue my point. In fact, if the price is right I will get the former Brazilian Secretary of Agriculture - whom I know - to translate the current numbers for you. I hate to break it to you, but your exaggeration won't bear up to scrutiny.
Your numbers are out-dated.
Yet you don't seem very inclined to bet on your initial claim.
Now I am really off to bed. If you want to put your money where your mouth is, let me know. If you want to simply repeat your claims, I am not much interested.
Bubba, I've been gamblin my entire life. I've Bet'em, and I've Booked'em. I've bet my last dollar on the turn of a card, my fortune on my "gift of gab," and my life on the goodwill of a woman; But, I'd NEVER bet a buck on a "Politician," or a Blogger.
It all doesn't matter, anyway. The objective of my post was to emphasize that this is Where We're Going. Good, Bad, Whatever. This is where we're going. It's easy. It's doable. And, it's here. The rest is just argyeein.
You've been offered the options of putting up or shutting up. Pick one.
And if you've got another ten grand you want to bet, I'll take the same odds as Robert. Why should he have all the fun?
You two sound like two fifth graders.
I'll betcha million!
Make it Trillion!!
So far, I'm the only one that's put up a Reference, though.
Here, let me give it to you in En the Local Dialect.
O Anuário Estatístico Brasileiro do Petróleo e do Gás Natural, divulgado nesta terça-feira pela Agência Nacional do Petróleo (ANP), em seu site, confirma um crescimento de 51,4% no consumo do álcool hidratado no País no ano passado.
Here, Have Another
The late Buz Ivanhoe on Brazilian subsidies (1999). Ivanhoe worked very slow and was unusually careful about accuracy. It is unfortunate that he is no longer with us.
http://web.archive.org/web/20070625025804/hubbert.mines.edu/news/Ivanhoe...
He's a troll...they don't shut up.
Staff does nuke the accounts of trolls on a regular basis. I haven't been moved yet to suggest this one, but I'm tempted.
Why yes, it would be a shame for anyone to be exposed to any point of view other than yours; wouldn't it?
I get my RDA of trollish idiocy on GCC, thanks. TOD doesn't need any from you.
kdolliso says,
How about a Groucho Marx quotation.
--- G.R.L. Cowan (How fire can be domesticated)
Kdolliso, what about RR's challenge? A real chance to show everyone where you are coming from. lol
I would like to suggest that part of any future taxes on gasoline should be based on a percentage of the pump price not volume. It is pretty well agreed that pump prices will rise again if and when the economic downturn starts to sort itself out. Such a tax would have much more direct influence on fuel consumption than a per volume tax. It is far easier for people to write off per volume taxes as just another inconvenience with out really cutting back on consumption.
I would also suggest that the above tax should be exclusively earmarked for alternate energy development (but not energy from food crops) and to support further incentives for conservation such as increased insulation and purchase of alternate energy devises such as solar panels.
I put this in the wrong link but it might give readers some respite from the war of words.
The next sentence on that wiki page:
When trucks and other diesel-powered vehicles are considered, ethanol produced from sugar cane represented 18% of the country's total fuel consumption in 2006.
Your claim was "50% of their transportation is through Ethanol."
So it looks like your claim is wrong.
No, I said 50% of their Transportation is through ethanol. Not their freight hauling.
Most people consider transportation to be the movement of people and goods.
For instance, from your favorite source:
http://en.wikipedia.org/wiki/Transportation
Transport or transportation is the movement of people and goods from one location to another.
Transportation includes light and heavy duty vehicles, aircraft, rail, shipping, etc.
Okay, I should have said "Private" transport. BUT, in all reality, when someone refers to YRC it's as a "Trucking" Company, or a Freight Company. They're not referred to as a Transportation Co.
To heck with it. Take the Pot.
51% of Private Transportation is from ethanol. Okay?
No, I don't feel silly. I don't go to your website.
Of course the first link was to TOD, and also a refutation of your claim...
Why would I go to the website of someone who obviously despises me?
I don't know you, and therefore can't despite you. But I do despise harmful propaganda, and I do believe you post it frequently.
Of course the first link was to TOD, and also a refutation of your claim...
It was posted back in 2006!
kdolliso and I are the main ethanol proponents who occasionally post here. I have been very critical of RR for a long time mainly because of the EROEI concept which he uses as the main basis for his ethanol position. EROEI is valid only when like and like are compared as in the case of two adjacent oil wells, but I will not go into that again here.
My point today is that I support RR's position on a big phased in increase in gas taxes, provided that ethanol is exempt from the tax. I find little to disagree with in RR's post today.
A much higher gas tax would facilitate the reduction or even the elimination of the hated ethanol subsidy and mandates. It would compensate for the hidden costs of oil such as wars for oil security, the strategic petroleum reserve, the oil depletion allowance and royalty shenanigans all of which are in effect now a subsidy to oil consumption but out of sight to gasoline consumers in general.
I applaud RR for his generous help to ethanol's future which his tax proposal would provide.
Wrong.
You forgot Phill. Natural gas is everywhere.
http://www.myphill.com/
And there are a LOT of government supported programs.
http://www.afdc.energy.gov/afdc/progs/fleet_exp_fuel.php/NG
Installing a Phill at home or in a gas station setting is
trivial.
The problem is to get people to buy the NG cars and trucks in the first place.
I looked a converting truck to NG - $6K which is an acceptable breakeven for me. The Phill, which is trivial to install from the technical viewpoint is an additional $6K captial cost even when the NG already comes to the house, ye gods, and that did not include attempting getting the local zoning board to approve this strange, outlandish, highly dangerous, (put in what you want)device.
It would be easy for the gas company to install a public
CNG 'phill' station if your own private system is too expensive. If it would help, the government could subsidize the installation with a tax credit.
http://www.myphill.com/files/USAspec20071.5.pdf
As far as the stupid conservatism of local fire inspector 'gods' and zoning boards go, it's perfectly possible for them to block any Peak Oil mitigation schemes in the name of safety.
http://www.myphill.com/files/PhillSafetyStudy.pdf
I remember that in Georgia they charged a special $25 'waiver' fee for emission inspections for ultra-low emission hybrid vehicles because the engines turned off rather than go into wasteful idle mode necessary for the test.
How can you argue with such stupidity?
No they haven't. Infact they don't have piped natural gas infrastructure at all (except may be in a small way that I'm not aware of).
All CNG is delivered and used in gas "cylinders". CNG works because of regulation and cost structure. The speeds are much lower that allows for slow acceleration of CNG vehicles.
Are you sure that those cylinders contain CNG? They look more like the LPG cylinders used around here. CNG would likely be stored in cylinders similar to those used in gas welding for oxygen, that is, smaller diameter with thicker metal to contain the higher pressures. There would be no circumferential welds in the middle of the tank as seen in the picture. LPG can store much more energy per unit volume at the same pressure, since the liquid phase is much denser than a gas. Then again, a tank as shown full of LPG would weigh more than 40 pounds, so transporting on top of the head would be unlikely...
E. Swanson
The picture shows LPG. India has both CNG and LPG automobiles - the regulation in many cities allows either of them to be used.
Here is the link to largest manufacturer of "autorickshaws" - which are open 3 wheeled taxis - http://www.bajajauto.com/1024/vehicle/threewheelerindex.asp
I didn't say a Thing about E85. We will achieve the biggest end of our ethanol usage by going to, first, E15, and then E20. This requires absolutely NO infrastructure changes.
I'm going to get a lot of down-arrowies for this;
As you should, because...
Best to ignore the arrows altogether unless one is running for office.
And how are we going to replenish the biocapital we're going to deplete creating biofuels? There is no such thing as a free lunch, and this really is a no-brainer!
I think that the idea of an energy tax would be more palatable to people if it were approached in a slightly different way. Instead of saying "I propose that we create a tax on energy (gasoline?) and offset it by reducing the income tax.", say "I propose eliminating the income tax and replacing it with an energy tax to fund government." That way, those who only hear the first part of the message wouldn't be immediately turned off.
Personally I like the idea of combining a form of rationing with fuel taxes. The idea is that up to the allowed rationing level you would pay the going market rate for fuel (with perhaps some moderate local tax) but fuel purchases above the allowed minimum level would be heavily taxed. Over time as fuel efficiency standards rose and as the public transportation infrastructure improved the allowed ration of ‘cheap’ fuel could be ratcheted down.
I also think that the same principle should be applied to domestic consumption of electricity and natural gas. If two people are living in a 6,000 square foot mansion with a heated swimming pool they should have to pay through the nose for the excess energy which they are consuming. We need to establish a general perception that excess energy consumption is a bad thing and not ‘OK if you can afford it’.
There should be a net increase in taxes, America and the west in general needs to go back to balanced budgets and saving. Debt will strangle the economy and pollution caused by rampant over consumption is killing the planet.
The choice is clear, as Jared Diamond wrote in the NY Times earlier this year, The West has a consumption factor of 32. They use 32 times more resources per capita than the average African or poor Asian and South American.
America has 5% of the world's population and uses 25-30% of it's energy and resources. This is clearly unsustainable. So the choice is clear, either the Americans voluntarily choose to curb consumption now by half or more or crash head on in the next 10-15 years into the brick wall of ecological and economic collapse.
What can't be sustained, won't be sustained.
This is not very convincing.
In Europe they pay double or triple what we pay for gasoline with regressive taxation and they use about half the barrels per person per year than americans do.
The reason they use less have a lot to do with the fact that Europe is more compact than the US. The even more compact Japanese with even more 'compactness' use a bit more per capita than the Germans.
Rich people use more resources than poor people.
Your solution is for rich people to become poor as if the poor are not even more vulnerable to economic collapse.
The US has large renewable natural resources. What the US needs to do is to use those resources to address our energy problems.
For example, the 'wind corridor' from Texas to Montana
has the wind capacity of say 9000 Twh of electricity.
If we used that energy to produce hydrogen gas by electrolysis at 'hydrogen stations'(33% overall efficient according to Ulf Bossel) and burnt it in fuel cell cars like the Honda FCX(66mpg) which are roughly 3 times as efficient as standard cars(22 mpg) we could supply 200 million cars in the US. 150 E9 gallons of gas x 22 mpg /(66 mpgge /(34 kwh/gge /.33%))= 5100 Twh.
(Don't bother to point out that battery cars are more efficient or that FC cars have some reliability problems). And this does not include vast solar resources, offshore wind, biomass, various fossil fuels, etc.
Clearly we need to get off our collective asses and look at using our numerous natural advantages instead of simply waiting around to die.
VK, we don't use any of the "World's" energy. We use our own, and what we "Buy" from the World.
Also, don't overlook the fact that we take that energy and produce, probably, 25% of the World's product.
Gas taxes reduce the sensitivity of people to underlying price increases in oil. They could reduce consumption to the extent that people cannot afford gas, but if they merely redirect money from one sector of the economy to another, they may not reduce consumption at a given level of taxation.
What is equally important is how the taxes are spent. It is hard to over emphasize this point, because gas taxes that fund continued sprawl and road construction might be worse than no gas taxes at all.
The Big 3 can help by producing low CO2 natural gas cars(Pickins Plan) and trucks(and better natural gas-hybrids) without major retooling. The government can subsidize the purchase with rebates. Trucking companies can convert to dual fuel diesel-LNG engines to save on diesel fuel(this really should be simply mandated). To stimulate demand Obama should raise emission standards to the point that cars older than 7 or guzzlers years will HAVE to be 'retired'--drivers will get a $3000 tax credit.
How much natural gas would it take over the next 10 years?
How much gasoline would it save?
An average car using 1000 gallons per year would burn 120,000 SCF(costing $600 per year given current $5/MMSCF).
If production were ramped up from zero to 10 million cars per year over ten years, that's 50 million cars total(a quarter of all US cars); using 120,000 SCF per car/year is a total of 6 Tcf over the first 10 years, at the end of which the US would be saving 230 million barrels of oil per year while using 1.2 Tcf per year.
The US currently uses 23 Tcf per year of natural gas and
it is practical to convert low rank coal of which the US has a lot into natural gas as well(and bury the excess CO2).
The least efficient use of NG is to use it for generating electricity for trains or electric cars.
Let's hope that Obama's people are looking carefully at
Picken's Plan.
This post makes no effort to quantify the benefits in terms of reduced petroleum consumption. If it were our goal to reduce highway transportation fuel consumption by 50%, what size tax would it take to do that, in your estimation? Less Econ 101 (with crossing lines on dimensionless graphs) and more MBA-style cost-benefit analysis, please.
We have just been through a period when the price of gasoline spiked by more than the gas tax you propose. What happened was that petroleum consumption declined by only about 10% and a large part of that reduction is attributed to the general economic decline, not just reduction of discretionary driving. If you're talking about giving people incentives to give greater importance to fuel efficiency when they buy new vehicles, again the case isn't made that our expecting $4 gas instead of $2 gas will cause us collectively to buy vehicles that get, say, 40 MPG instead of 25 MPG.
On the other hand, CAFE standards have worked to improve fleet fuel efficiency--and without the higher fuel cost. Why not do more of what works instead of trying to devise an untested Rube Goldberg market manipulation system to get to the same outcome?
Less Econ 101 (with crossing lines on dimensionless graphs) and more MBA-style cost-benefit analysis, please.
I wanted to write something people would read. Had I gone the MBA route, most people wouldn't have read it.
What happened was that petroleum consumption declined by only about 10% and a large part of that reduction is attributed to the general economic decline, not just reduction of discretionary driving.
Yet miles driven did drop by quite a large amount. And the price spike was unexpected by most, and not long-lasting. Imagine instead if everyone knew the price rise was coming, and it was permanent.
If you're talking about giving people incentives to give greater importance to fuel efficiency when they buy new vehicles, again the case isn't made that our expecting $4 gas instead of $2 gas will cause us collectively to buy vehicles that get, say, 40 MPG instead of 25 MPG.
Yet that is exactly the case in Europe, which has no fuel efficiency standards (per the associate administrator of rulemaking for the National Highway Traffic Safety Administration).
Why not do more of what works instead of trying to devise an untested Rube Goldberg market manipulation system to get to the same outcome?
Higher gas prices are proven to work, so it isn't a Rube Goldberg scheme. Europe, despite no fuel efficiency standards, has much higher fuel efficiency than the U.S. largely because of high gas taxes. We saw how price spikes over the summer impacted people's behavior. I have explained my issue with CAFE standards: They mandate that the auto industry should produce vehicles for which the demand is low. But we already have fuel efficient vehicles. We need to convince people to buy them. If the demand is there, you don't need CAFE standards to boost fuel efficiency.
Robert, thanks for replying—and I read your linked post. Still your argument is dimensionless. A $2 per gallon increase would do something, but not much. I have the same issue with carbon pricing (whether via tax or purchased CO2 emission rights). $100/ton of CO2 (which most say is a high number and which would more than double the cost of electricity from coal) would raise the price of a gallon of gasoline just under $1.00. If you want to bring about dramatic reductions in petroleum consumption you need to get realistic about how expensive market manipulation proposals have to be to accomplish that.
I have collected evidence (including some from The Oil Drum) that CAFE standards have worked and suggest they would have been even more effective if they had been raised higher and sooner and if the light truck loophole for SUVs had been plugged. http://www.realitybase.org/journal/2008/4/23/cafe-standards-are-much-bet... Note the graphs show real gasoline prices began to rise in 2003 above their 20-year plateau—but the fleet fuel efficiency did not rise above the CAFE standards under the influence of price.
What vehicle makers have done to sell small efficient vehicles is to raise prices of big inefficient vehicles to supplement the tight margins on the small cars. Plus, people buy small cars when those are the only cars available—just as they buy efficient refrigerators when inefficient refrigerators are unavailable.
Europeans do, on average, drive fewer miles per year than Americans, and fuel prices probably do contribute to the difference, but so do other factors like the wider availability of public transportation, fewer wide open spaces, more stable employment, and lower income levels. Americans’ average VMT has increased over 2 decades from about 10,000 per year to about 11,000. We had low real gas prices during most of that period, but we also had commutes getting longer as all new housing in California and other places was built in far suburbs.
Note the graphs show real gasoline prices began to rise in 2003 above their 20-year plateau—but the fleet fuel efficiency did not rise above the CAFE standards under the influence of price.
I think a lot of it has to do with price expectations. As long as politicians are promising lower prices, a lot of people will be frozen into inaction. In Europe, $4 gasoline did the trick. The Europeans knew the price would be at least that much, and they responded.
so do other factors like the wider availability of public transportation
And why is public transportation a popular option in Europe? The same reason Americans flocked to public transportation over the past year as gasoline prices spiked: People respond to price signals.
Robert, how much demand destruction do you predict would result from a $2 per gallon gasoline tax in the US? If you have a prediction, I would certainly be interested in how you get to it, even if you think that's too wonky for other readers.
Roger, I think we could get to the same kind of demand that Europe has, but it will obviously take a long time because of the infrastructure we already have in place. We saw this summer that 10% can come off pretty quickly. I bet that 20% could come off in 2-3 years as long as people have enough warning. It will take longer to whack 50% off so that we are in the same consumption league as Europe, but I believe it can be done. I will bet there aren't many people posting here who couldn't - if they really had to - cut their gasoline consumption by 50%.
Robert, according to this Congressional testimony by a fellow at Oak Ridge National Laboratory, gasoline price increases are an inefficient way to reduce petroleum consumption, and the EU, Japan, Canada, China, Australia, and South Korea all have fuel economy standards. http://209.85.173.132/search?q=cache:Byv2T0cBP4oJ:energy.senate.gov/publ...
Well, as I posted above an official from the National Highway Traffic Safety Administration says that up til now, Europe didn't have fuel economy standards. They didn't need them because gas prices were always so high.
Regarding your fellow at ORNL, data trump theories. We saw people respond to higher gas prices, and they did so pretty quickly. Further, I am not just proposing a gas tax. I am proposing an exchange of some income tax for some gas tax. The impact on the economy will be different than just a gas tax that sucks money out of the economy.
I'll have to disagree on CAFE standards. Overall fleet efficiency went down because passenger car sales shifted to light trucks with lower efficiency standards. At the same time minivans, SUVs and pickups became as comfortable and as easy to drive as cars. The vehicle footprint component of CAFE will be just as big a loophole. We'll end up with long, low, wide cars with the wheels pushed out to the corners.
Even with all the light truck sales, the Big Three practically gave away compact cars to meet CAFE standards. People didn't care about efficiency until gas hit $3.50.
Actually, no. The data show overall fleet economy (in MPG) for cars and light trucks plateaued at the legally mandated levels, while efficiency (measured in ton-miles) continued to improve. http://www.theoildrum.com/node/4790 There was a shift to light trucks, and that can be reversed with appropriate modifications to CAFE much more easily than trying to get people to make the shift in response to market signals when nobody knows what size signals will beget what size results. It seems to me that the politics are that manufacturers who oppose changes in CAFE standards will be no less opposed to a market manipulation system intended to achieve the same end result. If there is less resistance to a fuel tax increase than to making CAFE tougher, it's because the tax is expected to be small enough that it won't work to the same extent.
I believe in engaging both the fuel tax AND higher CAFE standards, at least 50 mpg by 2020.
The fleet averages of cars and light trucks may have plateaued, but light trucks increased their market share. The average fleet economy of cars and light trucks combined dropped since the late-80's. http://www.eia.doe.gov/oiaf/aeo/otheranalysis/aeo_2005analysispapers/fel...
I think measuring efficiency in passenger-miles is more useful than ton-miles. Technology improves efficiency, but all those gains have gone towards maintaining efficiency while vehicle weight increased through upsizing, adding comfort/safety features, and more powerful engines.
How would you propose modifying CAFE to discourage buying trucks as passenger vehicles? Assume the economy picks up and gas stays relatively cheap, say under $2.50/gal.
I think we agree on the facts, dwcal. According to the graph in your link, average economy declined from about 26 MPG in about 1987 to about 24 MPG in 2004. This was due to the increasing proportion of light trucks in the mix. You and I both understand the reports say technical efficiency gains have allowed the addition of weight and horsepower while maintaining fuel economy. The point made in my link to The Oil Drum, and my point, is that those technical efficiency gains could be used instead to improve the fuel economy of lighter, less powerful vehicles. Whether we do it by CAFE, or by trying to manipulate market forces, that is the goal, isn’t it?
In response to your question, I would raise CAFE standards on trucks, or eliminate the distinction between cars and trucks and have one CAFE standard for the combined fleet. We probably also need to raise the fine automakers pay for exceeding CAFE.
The problem with your position is that it does nothing to decrease the amount of fuel used by the existing vehicle fleet which takes a long time to turn over. In order to achieve quick results, we need to discourage VMT, not just encourage better MPG.
I accept your point, tstreet, that my proposal does not affect the existing fleet. But my original point was that a $2 per gallon tax would have only a small effect on VMT. At $2 per gallon, there would be about $300 billion per year changing hands. Seems like a big program for a small benefit. What if, instead, we used that money to buy up and crush 30-60 million gas hogs per year to accelerate the fleet replacement?
Yes, certainly this was the point of the Hirsch report, just mandating better technology take time, and we don't have that time.
That is the advantage of a gas tax: It forces people to consider their transportation choices every time they travel, not just when they are replacing their cars...
Robert: To a certain extent this discussion is about the placement of the deck chairs on the Titanic-8.5 trillion dollars has already been wasted and there is no indication that anyone (including the change guy) is in favor of limiting or controlling the bankrupting of the USA by the financial sector.
I'm sure all conservatives are desperate to change the income tax, a progressive tax, for a regressive consumption tax. The wealthy have lusted for that for quite a while. Not sure Obama is so totally clueless as to join that movement.
The more money a person has, the more likely they are to spend a substantial portion of it directly or indirectly on fuel. Those with less money have less to waste on fuel. Don't ignore the rebate Robert mentioned; that predominantly makes it progressive.
The lowest income brackets pay almost no income tax now. So RR is essentially taxing the poor to give the well-off a tax credit. Some progressivity.
Notice that this is not Westtexas' plan, to substitute a gas tax for the regressive payroll tax. That I could see.
So RR is essentially taxing the poor to give the well-off a tax credit.
You missed the part about rebating via tax credits even those who do not pay taxes.
It probably just is me. There's obviously some way to give rebates via tax credits to people who don't now owe any taxes that I'm unaware of. Maybe involving time travel.
I guess it is just you.
Why don't you Google the Earned Income Tax Credit for a similar example of taxes that can be rebated to people who don't owe income taxes?
TJ's right. A tax credit on income even for those with no income, requiring filing etc, will definitely miss a lot of people no longer "in the system". Also the author's idea of providing farmers tax credits to compensate is a bad one. Check how many real farmers across southern US eg. the ones who own the chicken barns and do the work of raising the chickens (as opposed to large agri-corp who own the chickens, provide the feed, and pay the actual farmer a pitance for the work), would ever qualify for the credit. Very often they're subsidizing the consumers by supporting the operation with of-farm jobs, hoping just to keep the land in the family until "conditions improve", though many must be getting very discouraged by now.
A tax credit on income even for those with no income, requiring filing etc, will definitely miss a lot of people no longer "in the system".
This is exactly the sort of nit-picking that results in us doing nothing. So we stick with the status quo, and hurtle toward the cliff.
So people who currently don't file a tax return will be required to do so in order to get the tax credit. Big whoop. I presume then that you prefer the current path we are on? If not, what do you propose?
I'd suggest, first thing is to use any revenues collected to reduce government deficits, then debts. IF there's anything left after, then start worrting about how to distribute.
If you count FICA, which you should since the govt. uses this money as a general tax revenue, the poor pay way disproportionate taxes compared to middle and upper income brackets.
The wealthy have lusted for that for quite a while. Not sure Obama is so totally clueless as to join that movement.
Yes, you have sniffed out my secret plan. I, along with the Rockefellers, Bill Gates, and Warren Buffet - am secretly trying to get the poor to pay more taxes so we can pay less.
This has nothing to do with my concern of how fast we are burning through our fossil fuel reserves and overextending ourselves. That will actually be good for the poor in the long run, don't you think?
Yeah, maybe that is your plan /snark. But you should be proposing Westtexas' plan, which has all your advantages yet fewer of the drawbacks.
Let's not ignore the fact the RR and WT plans are not mutually exclusive.
I agree with raising taxes on gasoline (and other other hydrocarbons), steadily. But I also think that income taxes should be much more steeply progressive, i.e. lower or even zero for the bottom half, the marginal rate climbing steeply for the top 20pct or so. Estate taxes should also be steeply progressive. Even asset taxes should be considered.
Even though there's deflation now, there will be inflationary hell to pay if we just print money.
The money raised should be targeted at taking us toward a nearly carless society: trains, buses, walking. Rebuilding dense, compact communities near agriculture and light industry.
The eventual depletion of hydrocarbons needs to be kept steadily in mind. We need to consciously shrink, not grow, to keep under the curve on the way down. There needs to be resource accounting, not just financial accounting, and the resource accounting needs to have the upper hand.
It should also be targeted at universal basic health care, basic food and living quarters for everyone.
And credit needs to targeted at those sectors of the economy that are crucial to survival, food, etc.
The should have been no bailouts of banks, but rather outright nationalization of the big ones that fail -- get rid of the middle man.
Everything that has been done and will be done has been done exclusively for the benefit of TPTB, the billionaires. The sole pretext for allowing the massing of huge wealth is as a premium for risk-taking. So why the bailouts? They lost. I know, millions of smaller investors also lost -- me too. Tough. The answer is a society that guarantees every one the basics -- the obligation to work if one can, the right to basics: food, health care, a place to sleep, a place to walk and talk.
Capitalism is failing. Where it still works, and it does to a degree in millions of small and medium sized businesses, it should be supported, although regulated, i.e. the environment and workers' safety protected. Pensions and health care, however should be gov't responsibilities, not theirs.
I've left out military spending. This is of course the worst of all. This more than anything else will destroy us as well as those it is being used to destroy.
EOR (end of rant)
This post would be a good letter to the editor, but is preach to the choir for TOD. The complexity here is the politics, not the common-sense arguments that you have noted. I paid a bit more attention to your post when you mentioned the fact that a gas tax is regressive - but your solution - to offset the tax with an income tax reduction most likely does not sufficiently mitigate the regressive nature of a gas tax to make it politically possible. As one post noted, many poor people don't pay any income taxes. Many of these people live in rural areas, drive old beat up vehicles and must spend a lot of money on gas.
A better way to lessen the impact of this on the rural/exurban poor is the only way to make this idea politically possible.
This post would be a good letter to the editor, but is preach to the choir for TOD.
As you can see from some of the comments, all of the choir is not in harmony.
But the essay is not really aimed at TOD regulars. It is aimed at the tens of thousands of lurkers - including political and business leaders - who drop by here every day.
Which is how TOD makes a true difference in this world.
John B. Anderson proposed a 50 cent per gallon gas tax during his independent run for the presidency in 1980. That won my vote for him. Unfortunately, Saint Ronnie won the election, and conservation died.
In general a good idea. Don't forget that the gas tax funds highways, roads, bridges, and transit capital spending. The gas tax as we already know it needs to go up substantially just to maintain present infrastructure. Adding another consumption tax would have to employ a separate pot of money. It would have varying impacts on poor and middle class people. A lot of transportation demand is inelastic because of the current state of local land use planning and development. Don't kid yourself, a $2.00 a gallon gas tax won't work when oil trades at $147 a barrel. Not in this country (USA)at least.
I agree with Robert's proposal for a gas tax increase offset by an income tax decrease. Furthermore, this is a good time politically, with both a new administration and gas prices much lower than last summer. I'm afraid that if we don't move swiftly, gas prices will rise while the economy continues to contract, and the political opportunity will evaporate.
Existing gasoline and diesel taxes, although they are only a few percent of US governments' income, seem handily to explain those governments' enthusiasm for hydrogen FCEVs (many, including me, railed in vain at this obvious loser. It was in vain because the obviousness of the loser status was not news to those who seemed unaware of it, and was definitely not bad news to them), for macho driving, for biofuels, for multi-year nuclear plant licensing procedures ...
If you want the most influential people in our society to be sly fossil fuel boosters, give them more fossil fuel tax revenue. If you want them to be employment boosters, give them income tax revenue.
If you want them to stop boosting fossil fuels and token alternatives, divide out existing fossil fuel tax revenues equally, as J.E.Hansen recommends (PDF), but do it first -- he understands government footdragging on AGW mitigation through fossil fuel use reduction, but doesn't seem yet to have struck his forehead with the heel of his hand and exclaimed, "Of course! They tax it!" -- do it first, before you raise the gross revenues, and do it with all the new fossil fuel revenue too.
--- G.R.L. Cowan (How fire can be domesticated)
Robert,
You make a good case for raising gasoline taxes in US. For people living outside US this seems such an obvious thing to do.
I suspect raising gasoline taxes is like gun control and universal health coverage, a good idea but will gather very strong vested interests that oppose.
On the other hand raising CAFE standards to 45mpg in 2012 ( as is happening in EU) would only be opposed by the not so big 3, and they can hardly provide any political opposition at the moment. This may be the one time when some radical improvements in new vehicle fuel mpg could be introduced as part of a financial re-organization.
The disadvantage is that it would not encourage less fuel use by existing vehicle fleet, but a solution would be to pay for accelerated crushing of older low mpg vehicles( mpg divided by age), thus stimulating new vehicle sales.
It may be possible to also raise gasoline taxes to at least pay for the full cost of road repairs, but not include a tax rebate.
Neil's comment on current political leverage seems right to me. However, I don't think we should require the Big 3 to produce more fuel efficient autos unless we also take action (through CAFA increases, I would suggest) to increase the size of the market for more fuel efficient vehicles.
I think Robert and I would both like to know why Europe is imposing CAFE standards in 2012 after 35 years of high prices. Prices weren't achieving the desired result?
However, I don't think we should require the Big 3 to produce more fuel efficient autos unless we also take action (through CAFA increases, I would suggest) to increase the size of the market for more fuel efficient vehicles.
My point exactly, except that higher gas prices would increase the size of that market! This is not theory, we saw that in action over the past year as people flocked to fuel efficient cars.
I think Robert and I would both like to know why Europe is imposing CAFE standards in 2012 after 35 years of high prices. Prices weren't achieving the desired result?
Europe currently uses half of what we do. So high prices are certainly achieving results here. Would it not be a desired result if the U.S. got down to European usage levels? Once we get there using proven methods, we can worry about moving to even lower usage levels.
IMO the best way is to replace one regressive tax with another, i.e. replace the social security tax with higher gas taxes. This should be done on a state by state basis because rural state residents drive more than urban ones do. So, some states might replace all of their SS taxes while others replace only a portion... the point is to be revenue neutral on a state by state basis to avoid rejection by the rural ones that have an outside influence in the US senate.
If Obama introduces cap-and-trade the initial price effect on hydrocarbon fuels will be slight. For example if the CO2 permit price was $20 a tonne that would add about 5c a litre to petrol or 19c a US gallon. However as the cap shrinks over the years to say 50% of the starting level the carbon charge would be more significant, up to say $1 a litre or $3.80 per US gallon. However carbon charges would also be added to household gas and fossil fuel fired electricity thus spreading the revenue base. That's a slow start broad based alternative to a pure fuel tax.
If the US opted for pure fuel taxes it may be better to distribute some of the revenue in restricted form. Instead of an income tax cut home owners may get free insulation, a smart meter or solar water heater. Thus while owning a car gets more costly the heating bills are lowered. Those schemes would need to be up and running from Day One of the fuel tax hike.
All this is great in theory but I think events are showing that radical change will be extremely difficult.
I wish I had more time to post, but real quickly-
I think the quickest way we could see real change in the US would be taxation by engine displacment. Taxation by weight always seems to have loop holes for some niche that people exploit. The only way to catch the "gas guzzlers" is by engine displacment and stop the farm/commercial vehicle exceptions. I think starting at engines >2.0L would be a good start.
It doesn't sound like much, but little things like this would be much more realistic in the near-term.
Wouldn't bug me one bit since my cars are 1.3L and 1.8L :)
Why wouldn't the gas tax also effectively be hitting the guzzlers, without having to ever lift the hood? It goes right at the target, fuel consumption..
Agreed.
Engine size alone does not determine MPG. Gearing has a large impact and larger engines with lower gearing can provide good fuel mileage on the road. Better transmissions have entered the picture and CVT or 6 speed manual shifting is now available. To my mind, the Prius is a form of a CVT system, only that the transmission is electric instead of hydraulic. The typical automatic transmission has a large energy loss due to the hydraulic pump that is continually providing the pressure to operate the shifting mechanism. Power steering is another source of loss, as the hydraulic pump is constantly working to keep the pressure up.
I had a 1973 Datsun 610 (1800cc engine, OHC, 2 stage carb) which I modified by replacing the 4-speed with a 5-speed from a later model, as well as changing the rear axle ratio to a lower number by switching to a rear end taken from a 280 ZX automatic. I was able to achieve better than 30 MPG on the highway as a result. I later owned a 1988 Mitsubishi (Cordia, 2000cc, 5-spd, carb with OX sensor) which did about 40 MPG on the highway. I think it's a bit strange that Detroit thinks 30 MPG is hot stuff worthy of a PR add campaign now 20 years on, especially after their resistance to increasing the CAFE standards...
E. Swanson
It is hard to find a car without power steering though.
The only time you actually care about power steering is when you are parallel parking, and the only place that I ever have to [put any effort into] parallel parking is downtown, in which case, I can hop on a bus that runs by my house every 10 minutes, (and more often at rush hour,) which means that there is very little incentive to drive...
Disconnect it. If you park in tight spaces, you can always rig up a switch or clutch so that you can use the PS in those circumstances only.
In my experience, moving the rack too much without the hydraulic pump turning causes the fluid reservoir to overflow. Not a good thing. This is aside from the issues in finding a suitable clutch for the PS pump.
Back in the days when power steering was optional, the cars with power steering had a different size gear on the rack and pinion than the same car with power steering, by a factor of 2 or 3 to 1. I think if you were going to disconnect the pump, you'd also want to replace that gear, which probably would mean replacing the entire assembly. After paying for the part, and spending the day taking apart the engine to install it, I not sure the extra mpg would be worth it...
Raising taxes on gasoline is a smart move for a not so obvious reason, that is, it would keep oil prices form going back up to $147/bbl on the way to several hundred per bbl. The benefits of a $5 per gallon gasoline tax would be avoiding a transfer of wealth to OPEC and preventing the total collapse of our system.
The government is broke and we the taxpayers have to perform the bailout. The current approach is printing money, so everyone’s savings will be destroyed. Germany followed this path in the 1920’s, suffered hyperinflation and power was eventually handed over to Hitler.
The end of the private automobile is approaching. We have 231 million in the US, 1.2 per every licensed driver. We don’t need to build any more. Those in existence will last as long as affordable gasoline. The large portion of our budget now being devoted to cars needs to be diverted to mass transit.
I disagree with your claim that private transportation will vanish. Electric vehicles eliminate the wealth transfer to oil exporters and render the affordability of gasoline (or ethanol, or biodiesel) irrelevant. Mass transit may attract some, but the Aptera fits better with US housing patterns and is definitely a path of lesser resistance.
Vans, pickups and SUVs made after say year 2000 could get a subsidised CNG refit. My guess is that at least 50% of drivers will not want or be able to afford an EV or PHEV. The NG may be there if it is not burned in power stations. Add a tad of biomethane or hydrogenated biomass. The H2 could come from renewables or nukes. Sure electric drive is more efficient but $10,000 batteries are a daunting prospect.
Someone needs to do a credible cost benefit analysis of refitting existing cars to CNG versus a fleet changeover to PHEVs. Most of the numbers would be pure guesswork.
If we switch from gasoline to CNG, then we would be trading one depleting fossil fuel for another. What happens when we pass peak natural gas? We will not be able to afford or make enough fuel to drive, heat homes, heat water, make fertilizer and make plastics all at once. We must go renewable, sustainable and environmentally friendly pronto to prevent us from crashing and burning.
I don't think plumbers will be driving around in electric pickups towing heavy trailers. You can make syngas from garbage using a plasma torch but the net energy is low perhaps negative. That syngas can be converted to methane with catalysts and maybe some extra hydrogen. That synthetic methane can be blended with NG or sewer gas methane. Add the three together;
(NG not used in power plants) + (methane from zapped garbage) + (biomethane) = a lot.
But your plumber's truck could be a paid off 2003 F350 after a $2000 CNG refit, not a new $40,000 PHEV. That's the Pickens-Boof plan.
You could make a F350 EV for not much more than $2000, you'd just have to forgo the fancy bells and whistles that come with AC systems. In something like a F-truck, using lead-acid batteries isn't as much of a drawback as using Lithiums, although there's still a financial benefit to using Lithiums (they last longer, can be drawn down further).
of course, plumbers trucks are in the minority. Having 'a few' of them running around on CNG isn't a big deal.
There is nothing to prevent a plumber's pickup being a series PHEV with the generator powered by natural gas. Electric motors are superior to ICE's in all characteristics meaning there will be no problem towing a fully loaded trailer. The electric "fuel tank" can not compete with a tank full of gasoline but that does not matter in a series PHEV.
In principle it's a good idea - I've long supported a carbon tax - but in practice it's difficult to get right, because people adjust to new taxes and continue consuming, and because taxes are usually less than market volatility. Also, if you tax it then governments won't want to get rid of it.
The thing is that whenever you introduce a consumption tax of any kind, there's usually a drop in consumption of the things it covers, then a year or so later the consumption goes back up again. People adjust.
This reminds of the UK study of people in poverty, they found that if the poor people had debt, it came from being well-employed and then losing their jobs suddenly, and in the first three months. If they were used to earning $500 a week and spending $500, then when their income dropped to $100 a week, they didn't immediately drop their spending to $100, but to $250 or so - and took about three months to get their spending down.
Basically whatever the price of this or that, if it stays the same then people adjust. So if you want constantly decreasing consumption, you have to have a constantly increasing tax on it. Rather than (say) $1.00/gallon straight up, you're better off with $0.10/gallon in the first year, $0.20/gallon in the second year, and so on.
Fuel is also a difficult one to tax because the market fluctuations of price mask any tax changes. We saw that here Down Under in the middle of the year when oil touched $150/bbl and unleaded was $2/lt - the proposed reductions of 5c or so a litre, nobody would notice, because the petrol stations change their price by more than that just during the week.
So for fuel tax to be noticed, it has to be much greater than market fluctuations in price.
Combine a fuel tax of (say) more than half the cost with that tax rising year on year, and it becomes very difficult politically.
By "politically" I mean not only among the public, but among political leaders. Because if increased tax gives lower consumption, at some point the tax revenue from fuel will decrease, too. Government becomes dependent on that revenue for various projects. We've seen that in my state of Victoria with gambling revenue - all are agreed it's a bad thing, but the state government needs the revenue to fund projects; just as gamblers are addicted to gambling, the government is addicted to gambling taxes.
Governments are reluctant to discourage things which grant tax revenue for their spending on various projects which can improve the state and their image.
Perhaps neuroscience can shed light on your suggestion of higher taxes now, to avoid higher pain later.
In The Biology of Dread (Nature Volume 7 2006)
The NM Rail Runner made its inaugural run from Albuquerque to Santa Fe and back today, with Governor Richardson and Albuquerque Mayor Mike Chavez on board. Five cars, 800 passengers. Not light rail...heavy rail, sharing the freight line.
http://www.pbase.com/intermodal/2008_december_rail_runner_inaugural_run
http://kob.com/article/stories/S706452.shtml?cat=670
Gov Richardson wants to extend the Rail Runner to Denver to the North and to El Paso to the South, following Interstate 25. Currently it runs from Los Lunas South of ABQ to Santa Fe to the North.
My wife and I rode it a few months ago from ABQ to Bernalillo (North of ABQ, not as far as Santa Fe) to a wine festival and back and it was a great way to travel...don't have to find parking and dodge the drunken idiots on I-25.
I am very hopeful for the energy future in NM: we have very plentiful sunshine for CSP and PV, with plenty of scrub land and lots of roofs. The Native Americans could make a killing putting solar PV and CSP on their lands right North, South, and West of Albuquerque and selling the trons. There is plentiful wind in large swaths of the state (think like Tx panhandle), promising geothermal potential, plenty of human know-how for nuclear energy (Sandia Labs and Los Alamos labs) (and the Waste Isolation Pilot Plant [WIPP] near Carlsbad), plenty of scrub sunny land for algae bio-fuel plants, and some gas and oil and coal to boot. Once again, the native Americans could make a great fortune exploiting all these resources on their land...this would be a healthy complement to their booming casino business and their lively craft trades. It would be great justice to see them prosper after being brutally subjugated and having their survivors swept onto the reservations (called Pueblos here).
Looking forward to the day when mostly electric cars zip around ABQ and beyond.
That being said, there is great potential to complement the Rail Runner with more and smaller electric buses (we already have larger CNG buses that are seeing good ridership). Once oil spikes again, this will become an obvious choice for us to make.
Borrowing Alan's tag-line style: Here's to a brighter less-oil-reliant future in New Mexico...
Cheers
On topic...yes to creating a gasoline/diesel fuel 'floor' with taxes...start at $3/gallon tax rate. which would set the price for gasoline right now in ABQ to ~$4.50/gallon. Plough the tax revenues into subsidies for solar, wind, geothermal, electric cars, etc.
This is so obvious it makes my head spin; the thing stopping it are the right-wing-nuts who would cry 'Socialism!', "Communism!', 'Fascism!', 'Terrorism!', 'Eco-tree-hugging-alternative-lifestyle-femi-Nazi-Godless-Communists' and so forth. They would threaten to dig up the guns and ammo buried in their yards and shoot the revenuers.
That, in a nutshell, is what holds us back as a country...~half of our people espouse, to greater or lesser degrees, know-nothing, jingoistic, sloganeering, bigoted, white-supremest, elitist, anti-science mindsets. These people cannot print money fast enough to lavish it on the military, and cannot try hard enough to get rid of every last penny of taxes...not one iota of regulation for health, environment, consumer safety and protection, but for all kinds of laws to regulate people's private behaviors, and let us not forget the shredding of the Constitution and dancing on the embers.
/rant off
Back to the topic: Implement a tax floor to eliminate the destructive oil price swings which would help facilitate a smoother transition to a post-oil economy.
You can now tell us how you REALLY feel, MoonWatcher.
While I am in substantial agreement, I don't see how a sudden increase in taxes by $3.00 gal could be implemented, politically speaking. I think it wouldn't be feasible to raise such taxes by more than about $0.50/gal for gasoline and $0.60/gal (more energy content) for diesel.
For new and imported vehicles, I would favor instead, a tax on the combined weight of the engine and transmission, say about $2-$4 per pound, at the point of sale. Half the revenue would go to the Feds and half would go to the states. The states would have the option of adding an annual registration charge based on this number.
By trading in vehicles with heavier power trains than the ones they buy, the consumer could actually make money on the transaction. The Detroit Iron would be crushed and recycled, or, if less than 10 years old or under 100,000 miles, be mothballed at a central location for future use.
To further discourage "personal" automobile travel, I would also favor that the speed limit be reduced to 50 mph for single occupancy vehicles, vehicles with children or the elderly (>65). Others would be limited to 60 mph. Enforcing this limit could provide a lot of needed revenue to local government. I think the fine could be enforced "photographically" without necessarily having to pull the vehicle over and write out a ticket, thereby extending the "productivity" of patrolmen.
The problem with a sudden rise in gasoline tax by $3 is that Americans may find it easier to reduce discretionary spending than gasoline consumption. This would negatively impact the economy likely causing an increase in unemployment. The unemployed do not use as much fuel as the employed causing a reduction in gasoline consumption by increasing poverty. People can not buy new, fuel efficient vehicles currently because credit is tight, they have no savings, their future employment is uncertain and PHEV's are not available.
The reason that it wouldn't go anywhere politically is because you have chosen the winners: solar, wind, geothermal....
Stop picking winners. Tell people that we need to reduce petroleum consumption, and we're going to reward everything people do to save by shifting taxes from income to petroleum... then get out of their way. Let the market and ingenuity work. Let electric cars compete with high-rise development on rail lines for people's money. Let wind compete with residential cogenerators.
What the USA needs is $50 crude, $5/gallon gasoline and something like a $2000/year FICA tax exemption to rebate every last cent of the tax so citizens, not pols or bureaucrats, decide what they want to do with it.
Regime change begins with trading in your car for a bicycle.
Check. I have been without a car for 10 months now.
Might I suggest you share your experiences as a feature article?
That seems like the question faced by the previous generation. Well, that battle has been decided. Clearer heads did not prevail. It is now a race to the bottom. That is the reality faced by this generation. It is every man for himself. If you save and conserve, the government will take your savings and give them to those who will not save and conserve. Do you doubt this? You better wise up if you think you're living in some kind of mystical "land of the free". The moment we gave in to the CFR propaganda, that was it. Game over. We ceased to be educated enough to understand how elite institutions shape our culture.
So at this point, the best thing you could possibly do for your children is to usher in the new post-industrial paradigm as quickly as possible, by consuming as much as possible! This seems to be the twisted logic that the masses are following. Unfortunately, a population that does not have any intellect or common sense is a population two steps away from enslavement and extermination. And even more unfortunately, a population that does not have any real wealth or assets is a population just one step away from enslavement and extermination. But who cares about that as long as we have our tv and pogo? Enjoy your journey into the 4th reich.
This whole discussion puzzles me. I grant that there are multiple problems with fossil fuels, petroleum, NG, and coal. For all there are both a pollution problem and a depletion problem. Fixing these are technical problems. But what does a tax do to actually address these problems? Instead ask, what is the price of paying for the technical fixes? Taxes might be an appropriate way to pay at least a part of the cost. But most (all?) of the discussion is about punishing some people and rewarding others. If we find and implement technical fixes, then civilization as we know it will survive. If we don't find technical fixes then some form of doomer scenario will happen. Will it make you feel better if your neighbor is hurt worse than you? That seems evil, especially if the extra hurt is directly caused by a tax.
Rationing is also useless without technical fixes to the technical problems. And, rationing might be useful the buy time for the technical fixes to start working. But without some technical fixes in mind, there is no way to design a rationing plan that complements the technical plan.
It's not 'Punishment'. It's a cost. If you have the money and choose to spend it that way, then you have engaged in commerce (as well as public policy and priorities), nobody has 'Hurt' you. If the costs have become too much, you have the opportunity to see what other options are out there, which didn't seem necessary when gas was just cheap enough. Furthermore, the 'punishment' is balanced in this proposal by an income tax credit, so the gas tax is not regressive, disproportionally charging lower wage earners more than others..
A tax proposal IS a technical fix, in the form of social and monetary policy (and is VERY technical, isn't it?) and, as RR has described very clearly, is intended to create incentives to drive less, to carpool, to bike, to get more efficient vehicles, to use mass transit, etc.
I can't see higher fuel taxes myself (but in my defence I am not American).
Call me a cynic but aren't taxes meant to take money from relatively small groups and benefit those larger groups with more electoral clout. i.e. middle classes being soaked to pay for the lower classes welfare and pensions.
Here you would have a huge electoral group, i.e. motorists being clobbered. I don't see this happening.
Adding a tax hike that is 'too high' will simply result in the party in power being vigorously 'unelected' come the next election cycle. The American tax payer is going to feel real vengeance at the pump if he/she knows that a good part of the price is because 'those XXXX politicians' raised the gas price. It is political suicide to talk about $1 or more a gallon taxes.
If you ration, you'd kill many American businesses. Companies would simply decide to move overseas where the cost of doing business is lower. If you want to expedite the move of manufacturing jobs overseas, then by all means place high carbon/fuel taxes on them. Asia is not likely to follow, and plants and facilities can move in a matter of months these days.
The whole idea of 'refundable fuel rebates' is half a joke. Likely 1/3rd of the US population does not even own a vehicle. Some drive once a week, some drive 300 miles a day. The direct and indirect hit will be more than a few hundred a year. It will be passed along in higher food costs (farming and transportation, higher costs to run the sales outlets), higher cost for local taxes to subsidize more heavily mass transit, higher costs of goods and services and merchants pass them along. A tax of 1.0 units likely will ripple through to hit consumers at 2.5 or 7.0 of the basic tax when all is said and done. It would be horrible drag on the economy.
Europeans pay $25,000 to $40,000 for 'small fuel efficient' cars. Americans aren't going to want to fork out $25,000 (Prius) to $50,000 for hybrid cars.
Tax on engine/transmission weight? Dumb idea. It is vehicle weight and design that determine MPGs.
Don't tax diesel? They'll be mass shift to diesel cars and trucks. Simple. All commercial vehicles likely will go diesel, with the resultant pollution (Particulates)