Tom Warne Report, 2 March 2013
Raising the gas tax would be a six- to 14 times more effective way to cut gasoline consumption than the White House effort to reduce consumption 20 percent by 2050 via fuel economy standards for vehicles, an MIT researcher says.
Research by Valerie Karplus of the MIT Joint Program on the Science and Policy of Global Change compared the cost of Corporate Average Fuel Economy, or CAFE standards, with the cost of raising gas taxes to cut consumption.
Writing in the New York Times, Karplus says:
Politicians of both parties understandably fear that raising the gas tax would enrage voters. It certainly wouldn’t make lives easier for struggling families. But the gasoline tax is a tool of energy and transportation policy, not social policy, like the minimum wage.
Instead of penalizing gasoline use, however, the Obama administration chose a familiar and politically easier path: raising fuel-efficiency standards for cars and light trucks. The White House said last year that the gas savings would be comparable to lowering the price of gasoline by $1 a gallon by 2025. But it will have no effect on the 230 million passenger vehicles now on the road.
Greater efficiency packs less of a psychological punch because consumers pay more only when they buy a new car. In contrast, motorists are reminded regularly of the price at the pump. But the new fuel-efficiency standards are far less efficient than raising gasoline prices.
In a paper published online this week in the journal Energy Economics, I and other scientists at the Massachusetts Institute of Technology estimate that the new standards will cost the economy on the whole — for the same reduction in gas use — at least six times more than a federal gas tax of roughly 45 cents per dollar of gasoline. That is because a gas tax provides immediate, direct incentives for drivers to reduce gasoline use, while the efficiency standards must squeeze the reduction out of new vehicles only. The new standards also encourage more driving, not less.
Bottom line-If it costs less to drive because you have a more fuel efficient vehicle then you are more apt to drive greater distances. We own a hybrid and use it often instead of our other vehicle. We don’t drive less but tend to use it for long distances. Two outcomes: First, we spend less on fuel, meaning less money paid in gas taxes. Second, we still make the same number of trips; only adjusting which vehicle we take. If you doubled the mileage we got from the hybrid nothing would change except we would pay even less gas taxes into state and federal treasuries. TW
