Higher gasoline taxes to boost efficiency would be ‘a mistake’
I couldn’t agree more with PEBO on Meet the Press Sunday: New gasoline taxes aren’t the way to boost energy efficiency.
Remember, European gas taxes have long been more than $2 a gallon higher than ours, and as of 2002, the average fuel economy of European Union vehicles was 37 miles per gallon, which is just a tad more than what the 2007 Energy Bill requires of new U.S. cars in 2020.
Of course, it would be politically impossible to raise gas taxes even $1 in this deep recession, even if you promised to give all the money back to taxpayers. A smart politician will instead focus his or her efforts on jumpstarting the transition to high fuel economy and plug-in hybrids, while leaving higher gasoline prices to the inevitability of peak oil.
Obama’s answer to Tom Brokaw’s question is here:
MR. BROKAW: Let’s talk for a moment about consumer responsibility when it comes to the auto industry. As soon as gas prices began to drop, consumers moved back to the larger cars once again, to SUVs and the big gas consumers.
PRES.-ELECT OBAMA: Right.
MR. BROKAW: Why not take this opportunity to put a tax on gasoline, bump it back up to $4 a gallon where people were prepared to pay for that, and use that revenue for alternative energy and as a signal to the consumers those days are gone.
PRES.-ELECT OBAMA: Well …
MR. BROKAW: We’re not going to have gasoline that you can just fill up your tank for 20 bucks anymore.
PRES.-ELECT OBAMA: Well, keep, keep in mind what’s happening in — to families all across America. Yes, gas prices have gone down. But, in the meantime, maybe somebody in the family’s lost their job. In the meantime, their housing values have plummeted. In the meantime, maybe their hours have been cut back. Or if they’re a small-business owner, their sales have gone down 50, 60, 70 percent. So putting additional burdens on American families right now, I think, is a mistake. What we have to do long term is make sure that we have an energy strategy that focuses on fuel-efficient cars, that focuses on providing incentives for fuel-efficient cars. Same applies to buildings. We have a enormously inefficient building stock, and we can save huge amounts of energy costs and reduce our dependence on foreign oil by simple things like weatherization and changing the lighting in, in major buildings. That’s going to be part of our economic recovery plan. It actually allows us to spend some money, put some people to work right away, but it also creates a long-term, sustainable energy future. And I think making some of those investments in ensuring that we change our auto fleet over the next several years, that’s going to be important as well.
Yes, I know that many readers think a higher gas tax would be a good idea. Readers know I am not against proposing things that are politically impossible today — like, say, stabilizing at 450 ppm.
It is, however, one thing to tilt at advanced windmills. It is another to squander huge amounts of political capital pursuing policies that won’t pass through Congress and that would make exceedingly little difference even if they did.
If Obama is going to pursue politically difficult policies, at least they should be ones that have very high impact. And again, peak oil is probably going to drive a gasoline prices back above $4 during Obama’s first term — unless this recession morphs into a genuine depression.
The only thing they can stave off peak oil is massive demand destruction. Only two things cause massive demand destruction:
- A severe global economic downturn
- A major global transition toward using oil more efficiently and replacing it with electricity
Assuming Obama can get us out of the first, the second is simply going to take too long to avoid $200 oil. But in any case, Obama will need all of the political capital he can to jumpstart that transition.
So I think his answer to Brokaw was spot on.