Let's Talk Gas Tax (Poll)
Posted by Robert Rapier on September 18, 2006 - 12:05pm
Topic: Policy/Politics
Tags: alternative energy, carbon tax, gas tax, global warming [list all tags]
First, I would like to poll the readers to get an idea of where people stand on this issue. The current federal gasoline tax is $0.184/gal. How high do you think gasoline taxes should be?
- It would obviously lead to conservation, which would help preserve our remaining fossil fuel endowment.
- It would encourage mass transit.
- It would make alternative energy sources more competitive with fossil fuels, without favoring a particular option.
- It would encourage more efficient city planning, and reign 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 (global warming, military expenditures, etc.).
- It would penalize alternative energy sources with low EROEI and reward those processes with higher efficiency.
So, what do TOD readers think? I am looking for critiques, disagreements, and just general discussion on the advantages and disadvantages of a much higher gasoline tax. I would like to come up with something that is palatable to the majority of people, and I want to push this idea to our political leaders. The knee jerk reaction will almost always be "no new taxes", and this is why I want to work through the issues with TOD readers before I start to push too hard.
Look at what happened recently with the "Transportation Bond Act" passed by NY voters last year. It passed because it was supposed to be earmarked for transportation. In reality, a chunk of it was used to pay off the previous transportation bond act, enabling the state to use the money that was supposed to go toward that for their own pet projects. IOW, the money the voters thought was going to transportation infrastructure was siphoned off and used for other things.
Blue states like NY seem to accept that as part of the price of doing business. Red states like Ohio don't buy it, and vote down such propositions.
The problem we had in NYC was decades of corruption, unresponsive public authorities and a state government that vetoed many good city projects and moved the money upstate. Robert Moses personally blocked all major mass transit projects and moved that money to highways for about 35 years. Then we hit the financial crisis of the 1970s and everything was put on hold while they put the finances back in order.
Mind you, New York City pays out more than $24 billion in taxes than it gets back in government services from the state and Federal level.
We have some very uncorrupt, competent and capable leaders right now in the city at least. Trying to clean up the mess of earlier generations that put the present ahead of the future.
The People ride in a hole in the ground.. it's a helluva town.
I agree, but I think the funds must primarily be given back as tax credits in order to sell the tax increase. I envision determining how much the gas tax would impact the average income family, and giving back a tax credit to offset this. That tax credit would gradually vanish at higher income levels. A portion should be earmarked for funding NREL and similar agencies, or for giving rebates to help purchase fuel efficient cars.
I think taxes need to be levied, but at the state and local level where there's much greater accountability and transparency and citizen input as to how revenues are spent.
If every state would implement a similar tax, that would work. But they won't. California might put on a $1 tax, and if Nevada and Oregon didn't follow suit there would be a lot of Californians driving across the border to get their gas.
Bwahahahahahaha!
Here in Illinois, we just sent a governor to prison. Chicago corruption is legendary.
If you provide credits to offset the tax, then you severly decrease the revenues for your project. IMO, monies for PO and AGW must come from the general fund because the monies needed to do anything serious is far greater than the amount raised by a gas tax net of credits alone. I offered a national solution for this quite awhile ago at TOD.v1--The dismantling of the global US Empire and its support structures would free up over a trillion dollars per YEAR to use toward mitigating AGW and PO, with no new taxes needed other than the repealing of Cheney's tax cuts. And just think of the drastic reductions in carbon emissions and petroleum use rolling-back the Empire would make possible. IMO, Powerdown starts with Imperial rollback.
The objective is not to generate (net) revenue. I agree that going that route would kill any chance of success. The objective is merely to raise the price of gas, raising the incentive for conservation and alternatives - without punishing consumers. It has to be more or less a "free lunch" in order to sell.
We could even sell it as a "punish Big Oil". Because conservation will cause less gasoline to be sold, it will have a negative impact on revenues. So, I might have to fight Big Oil on this one.
Personally, a gas tax refunded via a cut in payroll taxes would be a great deal for me. I don't drive much, since I live walking distance from my office.
But if everyone does what I'm doing, the government will be losing money, unless the gas tax increases or the rebate decreases.
Interesting, there are two potential stimuli to the economy: revenue would decline, increasing the deficit, and so would the transfer to oil states: the "oil tax" effect.
In theory you'd need to reduce the credit faster than revenues declined, to keep the economy on an even keel.
There are enormous constituencies for low gas prices, and very few for raising gas prices. Any politician who voted to raise the prices of gas would be voted out post haste.
I don't believe that our present Congress would pass such a bill, and I'm positive Bush would never sign it into law. In addition, I find it hard to believe that ANY future Congress would vote to raise these taxes. And what future president would sign it into law?
Better to let progressive shortages do the price lifting for us. Even if the price is coming down now, nothing short of a major recession will protect prices from going up next year. And the year afterwards, etc.
Another words, you want a solution where everyone can continue to chow down two large pizzas and a large cake without gaining a single ounce. Do you remember the phrase "No Pain, No Gain"?
Because Roberts plan is to refund tax money back. Therefore consumers aren't truely burdened by the tax.
Most people aren't burdened by the cost of home lighting, but they still have a strong incentive to buy CF lamps and capture the savings. Same thing with a gas tax and per-earner (i.e. not influenced by gas consumption) refund.
A fossil carbon tax needs to be effectively global to prevent even more flight of manufacturing to the 3rd world. A tarriff on goods based on embodied fossil energy could bring this close to reality.
I still think Carter's oil import quota concept would be more effective than a simple tax.
The gas tax scheme that I invision would be very simple:
- Tax all fossil fuel sales at a rate determined by the TOD poll.
- Split the proceeds equally among all citizens.
Since most people think that they are less than average users, this scheme might actually sell.ha ha! That wouldn't suprise me a bit. But one thing I'd try for is a zippy name. Because you can't fly anything unpopular without a good name. So I propose the the following:
Patriot Tax
Energy Independance Tax
Energy Security Tax
Homeland Defense Tax
I'm sure someone out there will have something better...any takers?
***
I don't think so. Very few Californians live within 100 miles of either the Nevada or Oregon borders. It COULD work in California if there were the political will here.
AS
But, same problem as at the Federal level, we don't have the will. People in the U.S. don't have the right mentality for a gas tax. Put simply, collectively we just don't give a damn. This is different than how things our in Europe where there is real concern about the impact of pollution and thus people are more accepting. I've said this before elsewhere when discussing this topic and I'll say it again here: our problems are not political, they are cultural! And changing an entire culture is extremely difficult and it doesn't happen over night.
If understand this correctly. You want to impose a gas tax and then refund the money back to consumers? How will that curb consumption? All consumers will do is funnel that tax credit back into their consumption. Some enterprising business will offer loans on their gas tax credit (as the do for income tax returns) so that consumers can continue immediate gradification spending habits.
Plus how do you track consumption? Do you think major of will keep all thier gas reciepts. I can't imagine the waste of man-hours (and energy) involve in managing all of the paper work.
The only real way for the US to curb global consumption is to raise interest rates.
>. That tax credit would gradually vanish at higher income levels.
Thats silly. For high income families, even high prices of 4 or 5 dollars isn't going to change their consumption habits. Hell some of them charter private jets for $7K to $10K for a weekend getaway. An gas tax that can be afforded by the low and middle classes is peanuts for the wealthly.
>A portion should be earmarked for funding NREL and similar agencies, or for giving rebates to help purchase fuel efficient cars.
Fuel efficient cars are already tax deductable. A better option would to increase the gas-guzzler tax and increase the milage rating so that more vehicles are exposed to this tax. The Tax revenues should be used to fund PO mitigation projects, such as water projects to supplement aquifier depletion in the mid west. If people cant eat, it does really matter if they can drive a efficient car or can use public transportation.
But they won't necessarily spend it on gasoline. They might consume, but they have an incentive now to conserve. They will have more money at the end of the day by choosing conservation options.
Plus how do you track consumption? Do you think major of will keep all thier gas reciepts. I can't imagine the waste of man-hours (and energy) involve in managing all of the paper work.
You wouldn't do it like that. You figure out what the average consumption is, and you base refunds on that. Those who consume more than average will be penalized, and will give that penalty to those who consume less. Those who consume less will be rewarded.
Thats silly. For high income families, even high prices of 4 or 5 dollars isn't going to change their consumption habits.
Then they shall surrender cash to those who do change their consumption habits. That is the point. The winners will be those who decrease their consumption. Their winnings will come from those who choose not to.
Spend it on what? What ever they spend it on is going to use fossil fuels. What if they use the refund money to on a vacation 3000 miles away. So instead of using refined gasoline, they use refined jet fuel from the supply of oil. How does that make a difference? What if the gas tax makes it cheaper to fly instead of driving? Or perhaps they will fill up with Ethanol or diesel or some other fuel that does have the tax?
>You wouldn't do it like that. You figure out what the average consumption is, and you base refunds on that. Those who consume more than average will be penalized, and will give that penalty to those who consume less. Those who consume less will be rewarded.
How do you do that? What if I am a handman, repairman or a plow man that requires me to travel for my job. Do you penalize them when its absolutely necessary for them to use a large amount of fuel? Sorry, but you haven't thought this through at all.
>Then they shall surrender cash to those who do change their consumption habits. That is the point. The winners will be those who decrease their consumption. Their winnings will come from those who choose not to.
It wouldn't work that way. The money given back will simply be use to consume products and services that use fossil fuels. All you will accomplish is shifting consumption slightly different and perhaps into different refined petro. products.
If you haven't figured it out yet, Money is stored energy that can be redeemed in just about any form the consumer wishes it to be. The only real way to cut consumption is to cut GDP or decrease the population.
Use fossil fuels at what level? The fact is that countries with high gasoline taxes have lower per capita energy consumption. Coincidence?
What if I am a handman, repairman or a plow man that requires me to travel for my job. Do you penalize them when its absolutely necessary for them to use a large amount of fuel?
Were they penalized over the past year due to high gas prices? What's going to happen to them after oil production peaks and prices skyrocket? Well, they could certainly raise their rates to cover the fuel increase, and I believe they can deduct the cost of fuel that they consume doing their job - even now.
All you will accomplish is shifting consumption slightly different and perhaps into different refined petro. products.
Countries with high gasoline taxes refute your argument. There is a strong correlation between the size of the gasoline tax and per capita energy usage - even in the U.S. among different states.
Robert FWIW, If I have a Chemistry question or a need a someone to dispute Ethanol, your the guy I would ask. When it comes to discussions involving economics and consumption, not so much.
- How does decreasing US consumption affect consumption in Asia?
- What affect on global market oil prices with a decrease in US consumption have?
- What will happen to consumption in Asia if global Oil prices decline?
- How can we (the US and Europe) enact policies within our govts to reduce the consumption of fossil fuel in nations that we can't regulation or enact laws in?
>Were they penalized over the past year due to high gas prices? What's going to happen to them after oil production peaks and prices skyrocket?I am not disputing that we need to reduce consumption. The argument that I trying to get through is that a US gas tax isn't the answer, and isn't going to reduce it if your intention is refund gas tax money back. From my propective you think you've only got a hammer (gas tax) and every problem is just a nail. Your trying to solve one problem, that prevent the gov't from using new income as a source for more wasteful spending, by refunding gas tax money back to taxpayers. If you give them money back, they just use it to consume energy, perhaps in a different form or perhaps not. You have no way of determing how that refunded money will be spent.
>Countries with high gasoline taxes refute your argument. There is a strong correlation between the size of the gasoline tax and per capita energy usage - even in the U.S. among different states.
None of those countries refund their gasoline taxes back to their tax payers. The use them to find there entitlement programs which is a another whole big discussion. BTW, does European gas taxes and regulation affect US consumption? How will a US tax affect consumption in China, India, and the Middle East?
Hopefully I am getting through!
Best of Luck.
Also FWIW, I work in the Planning and Economics group. I do lots of economic analyses.
How does decreasing US consumption affect consumption in Asia?
How has decreasing European consumption affected consumption in the U.S.? Does this mean that European's lower consumption is effectively meaningless? Of course not. They are much better prepared for price spikes and Peak Oil, because they have designed a society around high oil prices. Since we are the world's largest consumer of oil, we need to worry about reducing our own consumption before worrying about what Asia is doing. At the least, we will be better prepared for Peak Oil.
If you give them money back, they just use it to consume energy, perhaps in a different form or perhaps not. You have no way of determing how that refunded money will be spent.
I also have no way of determining how they spend any of their current take home income. But you have no chance of implementing something like this unless it is revenue neutral. Their take-home pay won't change, unless they start conserving. Of course the people who conserve are the least likely to spend extra money on energy, IMO.
Hopefully I am getting through!
I understand Jevon's Paradox quite well, I just don't fully accept it. I also understand your wish to raise interest rates - it is just that I see no path to getting something like that implemented. I see more resistance to that - which might be difficult for Joe Consumer to understand - than a revenue neutral gasoline tax designed to reduce our consumption.
>How has decreasing European consumption affected consumption in the U.S.?
Now your are spining by answer my question with an off topic question. Please answer the question "How does decreasing US consumption affect consumption in Asia?" Any reduction in US consumption will be consumed by Asia. US gas taxation is not a realistic method to control global consumption. Until you can prove that a US gas tax can reduce global consumption your just wasting time. You have not achived any goal.
>They [Europe] are much better prepared for price spikes and Peak Oil, because they have designed a society around high oil prices.
This isn't true, Europe is still very heavily dependant on heating oil, and Natural gas. And I can prove it. Just look at the European Natural Gas crisis and how a lot of business might need to shutdown if they can't get adquite supplies of natural gas. The Gasolinediesel tax has shifted consumption to Natural gas.
Europe's high population density will make it impossible to sustain a modern economy without adquite fossil inputs. For instance, Europe Agraculture is very depend on fossil inputs to maintain high crop yields to feed the population. They are just as unsustainable as the US, and perhaps even worse because they lack any significant coal reserves.
>Their take-home pay won't change, unless they start conserving. Of course the people who conserve are the least likely to spend extra money on energy, IMO.
You cannot increase energy taxes without raising interest rates, otherwise inflation will rise, resulting in higher wages that will remove the expense of the increased taxes. Once inflation kicks in no one will bother to save and opt to spend everything they make in fear of losing it to inflation.
>I understand Jevon's Paradox quite well, I just don't fully accept it.
This isn't about Jevon's Paradox. Its a simple Economics. Global Demand for Oil is already above supply. Therefore if any one nation reduces consumption some one else will immediate use. India and China can not fulfill there current Oil demand. You can read all about their Oil crisis in the India Times. If the US cuts demand by 5 mmb/d tommorrow, it would be immediately bought by China and India. The demand is already there, there will be zero lag.
Am I getting through yet?
>But you have no chance of implementing something like this unless it is revenue neutral
Taxes are not revenue neutral. What other tool is? Answer: Interest rates.
This is really silly. This is just Jevon's Paradox. But I reject that argument that we shouldn't try to decrease U.S. consumption just because people in Asia might consume more. Decreasing U.S. consumption decreases the worst-case scenario possibilities in the U.S. Steps that we take to make our society less dependent on fossil fuels are good steps to take, whether Asia increases their consumption or not. It goes right back to my question about decreasing European consumption. Application of your argument would say that this didn't accomplish anything for them.
This isn't true, Europe is still very heavily dependant on heating oil, and Natural gas. And I can prove it.
Reread my statement: Europe is better prepared for Peak Oil. That they are still dependent on heating oil is a straw man, because it doesn't address my argument that they are BETTER PREPARED than we are. And the reason is because fossil fuels are more expensive there. This has lead to less per capita energy usage, fuel efficient vehicles, widespread mass transit, and little suburban sprawl.
Its not "if they will consume more", its is absolutely asurred. Growth of consumption of Oil in China is constrained by supply. Remove the supply contraint and they will continue to consume more.
Jevons Paradox discusses that conserveration will lead to savings that will fuel growth in the future. In our present situation the demand is already exists. Consumption is contrained by supply. By reducing the US consumption would permit additional oil to flow to India and China help meet their current demand. There would be zero net decline in global consumption
Consider the 1973 Arab Oil embargo. During this time, the demand for oil was above consumption because of supply contraints. When the embargo ended supply consumption immediately increased. This is the situation China and India. have. They already have the infrastructure and population to consume a much larger amount of Oil. The only thing that is holding them back is the amount of oil they can purchase on the open markets.
>Europe is better prepared for Peak Oil.
This isn't accurate. This is would require a lengthy off-topic discussion, and is far off topic anyway.
Maybe they use it to buy energy-saving vehicles, solar panels, or the like.
This is by design. Purchases with less embodied energy will be more attractive to the consumer. Purchases which replace energy consumption with other things will be more attractive. All virtuous choices become more attractive; the government wouldn't have to go picking them out one at a time, allowing the markets to find solutions that policy-makers never would.
The US doesn't have huge entitlement programs aside from Social Security and Medicare. Even Medicaid is being cut back. If you think voters will accept diversion of tax funds after they've been promised a full offset, I think you misjudge the electorate.
How does Chinese dependence on Middle East energy affect US energy security? Aside from making it far more difficult to market foreign-built guzzlers to the US consumer, that is.
I am not disputing that we need to reduce consumption. I am disputing the method of using a gas tax to achieve that goal because it will fail on a global scale. Any policy enacted must reduce global consumption period.
>The US doesn't have huge entitlement programs aside from Social Security and Medicare.
I was referring to Europe's entitlement programs. Robert said that the High gas taxes curb demand in Europe and that it works. But Robert plan is to refund gas tax money back, which is pointless since consumers will just use the refund to buy more gas or use it on something else that also uses fossil fuels. Robert is attempting to slap on a band aid to remove gov't waste on tax revunues. No matter how many band aids you slap on, you cannot fix the fundemental issues with a high gas tax policy.
>>How will a US tax affect consumption in China, India, and the Middle East?
>How does Chinese dependence on Middle East energy affect US energy security? Aside from making it far more difficult to market foreign-built guzzlers to the US consumer, that is.
Why must everyone answer my questions with another off topic question? Please just answer the question or don't respond. The point I am trying to drive home is that its pointless to conserve at home if some one else is just going to waste it anyway.
Slapping out a simple plan to cut US consumption isn't going to address the fundemental issues. Lets come up with a realistic plan that addresses total global consumption.
Thanks
Cutting US consumption would also address the balance of trade and a bunch of other things. If there were fewer petrodollars out there, more of the money going to oil producers would be other currencies. This would cut the value of those currencies (like the yuan) and reduce the amount of oil that they'd buy.
There is also the issue of economic vulnerability. Right now the US can't do anything which would substantially affect the world supply of oil because we'd suffer the most. But if that weren't true, China (as the imperialist force in Asia at the moment) would have to cut oil dependence or leave the US able to squeeze Beijing into submission just by fiddling with the taps somehow (say, by helping some Shiites bomb pipelines in S. Arabia and starting something with Iran).
It is as on-topic as your constant changing of definitions and shifting of goalposts is.Right now I am lighting my whole place with two CF lamps (total consumption ~25 watts), editting on a flat-screen monitor (large savings over the CRT it replaced, and the next one will be even better) and driving about a mile to work. The savings make me better off than the people who are wasteful. Eventually, those people will be forced to change their habits and I'll be here as an example.
No, it would not. China has the fastest growth in Oil consumpion. In 1997 China was a net exporter, by 2004 it was the second largest importer. China's Oil import growth was slowed because of lack of supply. If the supply constraint was removed (perhaps by declining US consumption), it would probably surpass US imports in less than a decade. China has 1.4 Billion people, all eager to share the american dream. Slightly behind China is India with about a billion people, also very eager to obtain the american lifestyle. In addition, both of these countries lack any regulation on consumption, nor are there any significant enviromental laws. Both also subsidize fuel prices below market prices into order to prevent excessive fuel prices from curbing economic growth.
>There is also the issue of economic vulnerability. Right now the US can't do anything which would substantially affect the world supply of oil because we'd suffer the most.
The real vulnerability is declining access to oil in a oil dependant economy and society. Raising the interest rates would be effective in curbing global oil consumption.
Suffering will happen no matter what policies are inacted. Ideally, it would be far better to have some sort of semi-controlled landing instead of a straight vertical crash. The gas tax does nothing to affect the trajectory since it will not result in a global reduction in consumption.
> The savings make me better off than the people who are wasteful.
Good, but you need to get the entire globe to do the same to make a difference. Using a Gas tax will never achive that goal. FWIW: Even with the minor changes you have made, you are still very much dependant on fossil fuels, and these changes will not make much of a difference. When Oil production declines in just a few years, you will still be facing the same problems as everyone else.
>It is as on-topic as your constant changing of definitions and shifting of goalposts is.
I noticed you still haven't answered the question. How about another go?
BTW: I haven't changed my definitions or shifted goalposts. When you or someone else had posted an off-topic statement, I have done my best to respond to it. The points that I have been driving from my original response to Robert's comment are:
- A gas tax will not reduce global oil consumption, only shift consumption to other parts of the world.
- Refunding gas tax money will not curb consumption since, consumers can just rotate the refund to purchase gas or other good and services that use corpus amounts of energy.
I can't make it any easier.Note that you could stem that trend by proper allocation of the tax receipts - see below.
Oil is only a vulnerability if you continue to need it; the less the national economy depends on it (relative to others', e.g. China) the less it matters. Further, the only way to change the current situation of vulnerability is to get the economy to move to something else. Taxes and other negative preferences are the most efficient and effective method.Not true. You could allocate the fuel taxes to fill the SPR or other reserves; this takes oil away from other economies and also reduces carbon emissions. Allocating taxes to fill reserves places costs upon those parts of the economy (and not just the US economy) which are dependent on oil and gives relative advantages to those parts which use other sources of energy or dispense with need altogether (through efficiency measures).Taxing imports based on their embodied oil prevents the displacement of demand overseas.
You're assuming that the production of oil will continue at the same level regardless of net demand and price. Given the cost of developing new fields, this assumption is highly questionable and probably wrong.Incentive or disincentive to consume is a function of marginal cost. As the fuel tax with flat refund increases the marginal cost without any increase in disposable income across the spectrum, consumers will be rewarded for cutting their consumption and more will do so. Those who favor goods and services with less embodied petroleum will have more disposable income than those who favor the opposite. This builds a reward for cutting oil consumption.What gets rewarded gets done. Your assertion is not just baseless, it is the opposite of reality.
>Okay, what do you want to do about it? More to the point, what good does it do them?
Raise Interest Rates. The US is still the worlds reserve currency. By raising rates in the US, it would force the entire world to do the same in order to keep capital from moving to nations with higher rates and to prevent domestic inflation.
Raise rates cuts wasteful consumption across everything, not just personal transport. It would force consumers to also purchase smaller homes (likely consume less energy) and purchases goods and services that they need, not what they want since they will no longer be able to afford to use debt to fuel their lifestyles. For instance, how many americans would be able to afford SUVs without loans.
On the flip side, higher interest rates also protect savings from inflation, while higher taxes promote inflation. It also forces business to become more efficient in using capital to expand their business. Higher rates will force business to spend money more wisely and not jump foolishly into developing or expanding their business into wasteful enterprises. Higher rates will also help protect existing pension plans by lowerer the risks associated with reaching for yieldreturn on investment. Today because the interest rates are so low, many pension plans have turned to very risky investments (hedge funds, etc). Finally, interest rates do not unfairly penalize low income families and those that live on a fixed income (retirees). These people usually don't have much credit anyways and usually only buy what they absolutely need. Inflation also affects these folk harshly since they generally lack the capacity to increase their income and keep up with inflation.
>Not true. You could allocate the fuel taxes to fill the SPR or other reserves; this takes oil away from other economies and also reduces carbon emissions.
This would have been a good idea if we could guarentee that the SPR was managed correctly. The issue with using the SPR is that the politicians in office can use it to influence elections. For instance dumping oil from the SPR to help them get re-elected. It is impossible to determine how this reserve will be used or wasted in the future. The SPR Oil reserves can be used just as unwisely as tax revenue.
>You're assuming that the production of oil will continue at the same level regardless of net demand and price. Given the cost of developing new fields, this assumption is highly questionable and probably wrong.
Decliningn oil production (or declines in new production) is irrevelevant. The objective of any conservation effort is to husband remaining resources so that they last longer. At the minimum, we want to reduce demand below production. Ideally we want to end all wasteful consumption of fossil fuels globally, and use a the remaining reserves to migrate the infrastructure way from dependance on fossil fuels. If consumption in Asia is left unchecked, they will continue to expand another oil dependant infrastructure.
>Those who favor goods and services with less embodied petroleum will have more disposable income than those who favor the opposite. This builds a reward for cutting oil consumption.
It doesn't work that way, because gas taxes penalizes low income families more than middle class and the wealthly who already live fairly frugally. Those that have money will simply use to refund to consume energy anyway. Even if you refunded tax money disapportionally by refunding the lower income families more than the wealthy. These people would simply use the extra income to purchase goods and services that use energy.
Consider this simplified scenero. Every day from now on a family puts away one dollar for every gallon of gasoline they purchase. At end of the year, the family can spend that money on what ever they wish. What would the average american family do with that money? Most likely they will use to purchase good or services that use energy. Maybe it will be used for a vacation to the bahamas, or to buy a new car, a wide screen tv (shipped from half way around the world) All of these purchase use considerable amounts of oil, and therefore a program that refunds gas tax money is not an affect method to create conservation. It does really matter where oil is consumpted in the form of gasoline, jet fuel, or plastics. Oil is a finite resource.
For a gas tax to cut consumption, control of the refunded money would need to be restricted to a set of good and services that disapportionally use less energy. This would be an extremely difficult objective to achive.
I don't see why economic activity in general is a problem. Emission of fossil carbon in general, and use of petroleum in particular, is the problem. Economic activity which displaces or replaces these things is to be encouraged, while a general increase in interest rates would oppose it.
Last, this would not necessarily affect China. China's banks are government-controlled and are unlikely to move investment away from the mainland in response to the Fed. The way to hurt China is to disadvantage inefficiently produced or subsidized goods via tariffs; China's are both.
A tax shift is not a tax increase.Didn't you just complain that US conservation efforts would just shift consumption to e.g. China?
My purposes in conserving and replacing oil are to reduce GHG emissions, make the US less dependent on (and ultimately independent of) despotic regimes such as Saudi Arabia and Venezuela, and play to our relative advantages in non-fossil energy supplies and thus strengthen the USA compared to e.g. China. There is no point in making oil last any longer than we need it.
So consider the following hypothetical example:Are you saying that nobody would do this? Really?
You might also be right, that mostly the rich would buy the hybrids to save money. But the rich eventually trade in the hybrids, which are purchased by poorer people like Mr. and Mrs. Low Income. Either way the benefits of economy trickle down to the less-affluent, while they benefit from the tax offsets immediately.
And if they paid back into savings based on the embodied energy of what they bought, they'd be more likely to purchase less energy-intensive goods and services simply because they would be cheaper and yield more for their savings.Increased interest rates would very likely have the opposite affect on gov't debt and spending. The increased interest would force congress to cut spending and get serious about debt reduction. As it stands because interest rates are low, the gov't has no issues with deficit spending and actually incourages them to go on using credit to finance wasteful spending. Low interest rates cause wasteful spending.
>I don't see why economic activity in general is a problem. Emission of fossil carbon in general, and use of petroleum in particular, is the problem. Economic activity which displaces or replaces these things is to be encouraged, while a general increase in interest rates would oppose it.
To be fair, there is very little economic activity that does not use fossil fuels. I believe we will see a fairly dramatic drop in oil and gas production soon. It very likely that two largest fields, Gharwar and Cantarell are about to go into terminal decline(probably sometime in 2007 or early 2008).
>Last, this would not necessarily affect China. China's banks are government-controlled and are unlikely to move investment away from the mainland in response to the Fed.
US interest rates do affect China's economy. There is a lot of foriegn capital that has left the US and Europe because the interest rates were so low (hense the drop in the dollars value compared to other currencies). By raising US raises investors will move capital away from China (and Asia) because of the higher yields and implied lower financial risks. Chinas gov't controlled banks would be force to follow US rate hikes to prevent capital from moving to the US. China, Europe and the majority of major central banks usually adjust their rates when the US fed makes significant changes to US rates. For instance, when the US lowered its rates (down to 1% in 2004) the ECB (european Central bank) and the Chinese central bank both lower their own rates (although not to 1%). When the US began raising rates, both the ECB and Chinese raised their rates (although not as much as the US did). If Central banks do not raise rates and print money to maintain liquidity in their domestic market, it will lead to inflation cause a whole set of new economic problems.
>A tax shift is not a tax increase.
Taxing energy always leads to inflation. This is because businesses pass on their higher energy costs to consumers, which in turn demand higher wages to adjust to the higher costs. The cycle feeds on itself causing inflation.
>Didn't you just complain that US conservation efforts would just shift consumption to e.g. China?
A higher US interest rate would force the worlds Central banks to raise their rates resulting in decreased economic growth and reducing demand for fossil fuels. Higher rates would also promote businesses and consumers use energy more efficient and spend capital more wisely. ie smaller homes, cars, etc.
>A $2/gallon petroleum tax is applied, which generates roughly $400 billion/year. This is refunded as a deductible on Social Security taxes, averaging $2780 per wage-earner over the US's ~144 million workers.
Social security surpluses are used by politicians as a "slush fund" to pay for programs that will help encumberments get re-elected. That last place you want higher tax revenue to end up is in entitlement program funds. ie politician X campaigns to raise entitlements using the extra revenue or use it to build a new highway to create local jobs, etc.
>Mr. and Mrs. Low Income, who both work and earn a combined $30,000/year, currently use 1180 gallons of motor fuel per year between them. Their after-tax income increases by $5560 per year, offset by $2360 in fuel taxes and some increase in consumer costs for transport.
What ever money that is refunded to them can be used to consume fossil fuels. What ever increased tax revenues received by the gov't will be used for additional wasteful spending. Over a period of about 3 to 5 years, the gas tax will result in increased inflation (proportional to the increased tax rate), as businesses pass on higher energy costs to consumers and increased tax revenue coupled with poor gov't spending managent. Higher interest rates is by far a better choice.
>And if they paid back into savings based on the embodied energy of what they bought, they'd be more likely to purchase less energy-intensive goods and services simply because they would be cheaper and yield more for their savings.
They won't consider saving money if there is inflation. Why save money if its just going to be inflated away? However higher interest rates does persuade consumers to save. Higher interest rates causes lower inflation and increased yields on savings.
>My purposes in conserving and replacing oil are to reduce GHG emissions, make the US less dependent on (and ultimately independent of) despotic regimes such as Saudi Arabia and Venezuela, and play to our relative advantages in non-fossil energy supplies and thus strengthen the USA compared to e.g. China. There is no point in making oil last any longer than we need it.
When Oil production collapses GH emissions will increase. This is because gov'ts, consumers, and business will turn to dirty fuels that produce far more GH emissions. They will increase us of fossil fuels and use renewable sources in non-renewable ways. For instance, in the Northeast, lots of consumers purchased wood stoves to help heat their homes. As oil and gas become expensive, the demand for wood to be used for fuel will soar, causing deforestation. Before the development of Oil and gas, much of the Eastern US was deforested from the demand for winter heating, and running equipment. When Oil and gas became accessable, cheap, and easier to use, the trees grew back.
Today, the US population is more than twice as large as it was during the begining of the 20th century when oil and gas began development. It wouldn't take very long to deforest the region again (we have better technology to harvest wood and more people that need fuel). This time around it won't just be the US destroying the local enviroment, it will happen all over the world, especially in Asia. I have now doubt that GH emissions will more than double once oil and gas become expensive.
Wind power uses very little compared to what it displaces. There are also huge variations between activities which are net consumers. Changing the balance of activities and investment from heavy consumers to light consumers or net producers is a positive step.Cantarell has been in decline since last year.
That's the point, to increase the price of oil-intensive goods and services. Feeding the tax back as an addition to wages automatically increases purchasing power to compensate. Goods and services which are less oil-intensive will increase their prices less or not at all, thus becoming more competitive, more attractive to consumers and tend to shoulder out oil in the marketplace.
It can only do that if they're allowed to keep it. A full refund of the tax as a rebate doesn't leave it in their hands.
You keep repeating that, without ever acknowledging - or realizing - that the net effect on purchasing power is zero and that the increase in the marginal cost of oil and oil-consuming goods and services creates an incentive for all consumers to buy something else, and all producers to economize or replace oil in their businesses.
Tonight, I paid $2.499 for diesel. Saving a gallon would leave me two and a half bucks to the good, or roughly 6 cents per mile the way I drive. If diesel cost $4.499, it would be a lot more attractive to spend time closer to home and drive slower when heading elsewhere. It would make the closer destinations relatively more attractive.
The same can be said for high interest rates. If you can get a 7% return on investment by insulating your house, but a 10% return on a bond, most people will put their money in the bond. 2% interest makes insulation more attractive than bonds, especially because the insulation is a hedge against inflation in energy supplies.Doesn't this mean that it is REALLY important to get the pro-efficiency, pro-wind, pro-solar, anti-GHG regime into place now? If we don't get the R&D and industrial investment moving that way pronto, it may be too late.
Then simply provide special low interest rates on loans that promote the construction of energy efficiency systems and sustainable enegry. What ever incentives work with tax breaks would work equally or better with special low interest rates. If one is going to go into debt in order to save money, you can bet your bottom dollar they will make every effort that it pays off. This is not so with a tax incentive, since they can come out ahead even if it doesn't save the money.
>Cantarell has been in decline since last year.
The key word is "terminal" decline. I believe production from these fields will drop below 50% of current production probably either next year or in early 2008. The water cut is rising rapidly and neither producer is willing to cut production in order prevent billions of barrels from slipping by (never to be recovered). They are literately sacrificing billions of barrels just to maximumize production.
>Goods and services which are less oil-intensive will increase their prices less or not at all, thus becoming more competitive, more attractive to consumers and tend to shoulder out oil in the marketplace.
It doesn't work that way. If inflation gets a hold in the economy, people just go on consuming their usual way. If it gets real bad they will increase their wasteful spending habits. For instance, during the 1970's, a period of stagflation, there was no effort made by consumers to conserve, nor was there any sigificant effort to build more fuel efficient vehicles. It wasn't until interest rates rose significantly during the end of the 1970's that the nation took interest in efficiency. When the interest rates rose, the auto industry was forces to produce smaller cars because people could no longer afford to purchase large vehicles.
>The same can be said for high interest rates. If you can get a 7% return on investment by insulating your house, but a 10% return on a bond, most people will put their money in the bond.
Not really, If interest rates are high, consumers do everything to cut costs. For instance, they use lower wattage light bulbs, turn down the thermistat, use fans instead of AC, etc. If installing insulation saves money they will do that too. What your missing is that majority of US consumers have little savings and a lot of debt. As interest rates rise debt become painful, and they act to cut costs so they can pay down their debt. They also can't afford to take on more debt to continue their wasteful spending lifestyles.
>Doesn't this mean that it is REALLY important to get the pro-efficiency, pro-wind, pro-solar, anti-GHG regime into place now? If we don't get the R&D and industrial investment moving that way pronto, it may be too late.
To be honest its already to late to prevent severe hardships. I believe we only have a few of years left before oil and natural gas shortages begin. There simply isn't enough time make a transistion now. The way gov't works (special commitees, feasibilty study, yada, yada) it will take them a decade before any serious contruction effort begins anyway. Then consider NIMBY and all the resistanct change by the public. Look what happen to the wind farm project off the coast of Massachusetts.
Only investing in wind is feasible. Solar is not practical because of a number of factors. For instance the manufacture of solar panels uses lots of energy, lots of water, can creates large amounts of chemical wastes. If you include all of the associated costs (mining, processing, clean up (toxic wastes) solar panels have a negative EROI. Although Wind does have an issue since it can only produce electricity when the wind blows, but can be offset using man made lakes than can used excess wind to fill and be drained through hydro-turbines when the wind isn't blowing enough.
The real issue is one of transportion fuels and the our massive economic dependance on petro chemicals, fertializers, pesticides, plastics, etc. These can't be replaced with electricity. Its also not practical to heat tens of millions of building using electric heat.
FWIW: I don't see america or the rest of the world making any serious investment in replacing fossil fuels until we experience a severe energy crisis. There are probably less then a dozen politicans activity speaking about peak oil in the US. The rest are either looking to pass laws to develop the remaining reserves or to go after the oil companies. Neither of which will make the slightest difference in the long term.
In my opinion, your best option is not wait for gov't action, but start work on your own preprations as soon as possible. Ideally you want to avoid living in urban centers and become as self sufficent as you can. If your holding out for some national effort, you will very likely be disappointed, plus you'll be left up a smelly creek with out a paddle and a boat when the crisis begins.
Best of Luck to you.
Certain business models might be a highly effective way of reducing petroleum use and GHG emissions, but how do you aim loan incentives at a business model? Taxes do this quite effectively, as the business in tax shelters proves.
Worse: if a new and more effective scheme was developed after the passage of such a program and wasn't included under its terms, it might never get any investment because it would require changing the law and going against entrenched interests already profiting from the flow of money.
Worse yet: no system of subsidies is going to reward people who just stop doing something fuel-consumptive. Taxes do that implicitly.
Last: it's mighty ironic to read a proposal for subsidized loans from someone who is virulently opposed to gas taxes. Just where do you think the government would get the money for subsidies, bake sales?
That must be why American's consumption of gasoline rose during the period of inflation and afterward.Oh, wait. It fell from 1978 to 1983. It was only when Reagan's deficit spending got going (and Carter's energy-efficiency programs had been dismantled and discredited) that gas consumption took off again.
Hogwash. If interest rates are high, capital expenditures get pushed out by consumption. At a high enough interest rate, an incandescent bulb is a better investment than a compact fluorescent; you pay for the lamp in advance, but electricity is purchased with discounted future money.Yeah, but what does that have to do with the most effective response? Nothing.
Then why does all your thinking revolve around GOVERNMENT subsidies and the like, rather than private enterprise working on minimizing oil/GHG taxes (and thus oil/GHG problems)? It's like you WANT failure.
Transportation fuels are the only one of importance. The rest are consumed to the tune of a few tens of pounds per capita per year, and could easily be made from biomass.
The people living in buildings with electric heat would beg to differ with you. I'm living in one now.
I wish you'd get your facts straight. It's like you've got these ideological blinders on, and refuse to compare the bogus map you've been given against the landscape right before your eyes.
I was comparing tax incentives vs interest rate incentatives.
>Oh, wait. It fell from 1978 to 1983. It was only when Reagan's deficit spending got going (and Carter's energy-efficiency programs had been dismantled and discredited) that gas consumption took off again.
In late 1977 the US Fed began raising interest rates. In 1978 the Fed rate was just under 8% and in 1982 it was above 12%. It wasn't until 1983 that rates began to fall. See the table using the link below:
http://www.federalreserve.gov/RELEASES/h15/data/Annual/H15_FF_O.txt
You can see from the next link below, that during the period of 1959 to 1983 the US fed Gasoline tax was flat.
http://www.artba.org/economics_research/reports/gas_tax_history.htm
So if we to create a chart plotting energy consumption taxes versus consumption it would have no net impact on consumption. In fact, as taxes on gasoline increased consumption increased. During periods of rising interest rates we can see decreased consumption.
>Hogwash. If interest rates are high, capital expenditures get pushed out by consumption. At a high enough interest rate, an incandescent bulb is a better investment than a compact fluorescent;
Nope, Sorry this is incorrect. As I tried to explain earlier, as rates rise debt becomes difficult to manage, businesses and consumers do what ever they can to reduce costs. The cost difference between a incandescent bulb isn't that much from a CCFL bulb and makes economy sense to switch. Athough some efficiency improvments would be off the table. For instance, homeowners aren't going to bulldoze their homes to replace them with new homes that are three times more energy efficient. But few if any americans would consider this an option that no matter what financial situation they are in.
Of course if you really want to make homes switch to CCFL or purchase more efficient devices, a better solution would be to ban production of less efficient designs (incandescents). For instance, we could ban the use of inacadence bulbs just like CFC were banned in the 1970s. This could be applied to a signficant number of applicances. Of course CCFL have their issues, since they contain heavy metals and other toxic pollutants that will eventually contaimate ground water.
>you pay for the lamp in advance, but electricity is purchased with discounted future money.
I see where your logic is coming from but it doesn't work that way. For starters, people don't plan ahead. The majority of people go about there daily business and at the end of the week see how much money is left for discreationary spending. Second, in a inflationary cycle incomes rise to offset declining purchasing power. As long as they have extra money left over and their expenses are lower than their income, they won't act to become more efficient. Why would they and they have absolutely no incentive to save money either. In a deflationary cycle consumers and business have no choice but to reduce costs. Cost reduction can come from reduced spending or improving efficiency, or a combination of both. Either way they cut costs, resulting in reduced consumption.
>The people living in buildings with electric heat would beg to differ with you. I'm living in one now
The issue is that the grid cannot handle adding millions of buildings for electric heat. Only a small portion of buildings use electric heat today. By a far majority, buildings are heated using fossil fuels. Using electric heat is also very inefficient (like incadencant bulbs). There are huge losses converting thermal energy into electricity back to thermal energy. I suspect that when constriction of fossil fuels begins, a significant number of people will begin to start using portable and very inefficient electric heaters (especially in apartments). In this situation, the grid will become overloaded resulting in rolling blackouts during the winter. This of course will be very unpleasant.
>It's like you've got these ideological blinders on, and refuse to compare the bogus map you've been given against the landscape right before your eyes.
I have no ideological beliefs period. I am a realist and strong believer in practical solutions.
>Transportation fuels are the only one of importance. The rest are consumed to the tune of a few tens of pounds per capita per year, and could easily be made from biomass.
You have grossly under estimated the use for fossil fuels as feedstock for petrochemicals. For approximately every food calorie you consume at least 10 heat calories are used to produce it. Every single product made uses oil or requires some other fossil fuel to produce it. Second using biomass as a replacement would be converting a renewable resource into a non-renewable resource. When you take biomass off a field you deplete the soil of carbon not just nitrates. It takes a long time for nature to naturally enrich soil into carbon rich top soils. Farms usually only take the crop off but leave the stalk and roots on the ground so that most of the carbon remains. However, if you intend to pull the entire plant and burn in a gasifer for fuels or chemicals, it won't take very long to deplete the soil. This will also result increased GH emissions as soil carbon is remove from the land and put in the atmosphere as CO2.
Some people say that income taxes are a disincentive to work, as they amount to a tax on productivity. I happen to agree, which is why I propose to tax (oil/carbon) instead. If the power to tax is the power to destroy, let's destroy OPEC and our environmentally hazardous activities. If it pays well enough, people will create alternatives and switch to them.
It was in 1985-86 that oil prices seriously fell. It was also right about then that GDP started heading up again. It's easy to see that these things are coupled; when less money started going to OPEC, more was available for investment and job creation.The only way to uncouple those two is to disconnect the price of products from the price of crude oil. If it's expensive to buy OPEC crude and foreign LNG (because of taxes), it makes it relatively cheaper and more attractive to use wind instead of NG-fired turbines, a hybrid instead of a guzzler. Europe has shown the way; European consumption of motor fuel has remained roughly flat even while GDP has risen. US GDP has risen faster, but our oil consumption has skyrocketed despite CAFE regulations and other half-measures. It's well past time to bite the bullet.
And any cost will do, while you want people to preferentially reduce their spending on fossil fuels. You're not aiming at the target.I wouldn't ban them, some purposes still require them. I'd just tax them instead: 1¢/watt on bulbs, 10¢/watt on the rating of fixtures. CFL's are already discounted down to the $1.50 range, so such a tax would make the retail prices roughly equal.
You didn't specify resistance heat (there's a heat pump about 10 feet off my right elbow).
You do show that it's important to ask the right question. I blogged on that a year and a half ago; I think you'll agree that the combination of cogeneration, wind and resistance heat could save a lot of fuel for very little money.
No, you have; only about 11% of US petroleum usage goes to "other", and that inclues aviation gas, kerosene, lubricants, naptha-type jet fuel, pentanes, petroleum coke, refinery gas, waxes and crude used directly as fuel. The US and Canada only consumed about 110 billion pounds of resins in 2005. That's roughly 330 pounds per capita. Compared to US oil consumption of 7.3 billion barrels/year (almost 8000 lb/capita/year), that's chicken feed.I'll let you do your own research on the contribution of surface-lying crop wastes to soil carbon, vs. roots left in situ with zero-till practices. The answer I found some time ago is very different from what you're claiming.
The losses are acculative no matter the technology used. For instance, a fuel is used to heat a working fluid Such as water to a gas (liquid to gas losses), which drives a turbine (further losses) to drive a generator (further losses), that is passed through a transformer (further losses) that is transported a substaintial distance (further losses) to another substation transform (further losses) to your street (loses) to a another transformer (loess) to your heat pump. Before it even reaches your heat pump, more than half of energy is lost, therefore its terribly inefficient. A modern gas furnance can be better than 90% efficient. If you thinking of bring up the losses to transport fuel to the building, consider that there i also considerable losses transporting the fuel to the power plant.
The reason why the majority of buildings today use fossil fuels is because is more efficient and does burden the grid. You cannot simply ignore the gigiantic load using electricity for heating would create. The Grid is no capable of handling it. Lets also not forget about the load required to create domestic hot water too.
>It was in 1985-86 that oil prices seriously fell. It was also right about then that GDP started heading up again. It's easy to see that these things are coupled; when less money started going to OPEC, more was available for investment and job creation.
That was mostly geopolitical as KSA opened the spigots causing the price to fall. It has nothing to do with economics. By late 1990 after Iraq invaded Kuwait, the price rose.
I think I have done a good job of proving to you that interest rates are an effective tool to curb consumption and promote energy efficiency. Its not perfect but its effective and has the ability to curb global consumption which a domestic gas tax can't do.
>I wouldn't ban them, some purposes still require them. I'd just tax them instead: 1¢/watt on bulbs, 10¢/watt on the rating of fixtures. CFL's are already discounted down to the $1.50 range, so such a tax would make the retail prices roughly equal.
Sure, I was just pointing out a way a better way than a gas tax to get people to use more efficient products. Although banning would be better since its likely the taxes will be used wastefully, ie fund new road construction or entitlement spending. I see no reason to just ban them to simplify the issue, and give manufacture a grace period of a few years to make the adjustments.
>No, you have; only about 11% of US petroleum usage goes to "other", and that inclues aviation gas, kerosene, lubricants, naptha-type jet fuel, pentanes, petroleum coke, refinery gas, waxes and crude used directly as fuel.
That's only for Oil, you need to look at the "other" fossil fuel. The US consumes more btus in n. gas than it does in oil. N. Gas is also running out. Consumption of N. Gas by BTU was nearly double of oil consumption in 2003.
>US GDP has risen faster, but our oil consumption has skyrocketed despite CAFE regulations and other half-measures. It's well past time to bite the bullet.
Cutting transportation fuels will help but it is not a solution. Any like I said energy taxes on the US does not prevent consumption growth in Asia. Managing interest rates are the only means at our disposal to curb global consumption. Any efforts less then curbing global consumption will be pointless.
Unfortunately it looks like a higher gas taxes are in our future, both parties are now seriously discussing increasing the gas tax. I think we will see some reduction in US consumption (not from the higher fuel costs) but from a pending recession, which will permit China and India to expand their consumption do to the drop in US consumption. China and India currently have major construction projects to add substaintally more refining capacity. The total global consumption will remain flat (plus or minus total global production). I suspect that whatever new taxes are added, they will not increase prices above the gasoline prices experienced this summer.
None of this is a migation program which is absolutely required. The US would need to invest between 5 and 10 trillion in replacment infrastructure, but the US gov't is affectively bankrupt (explained by both a Fed reserve governor and the US comptroller). We have no funds to pay for such a massive project. In a few short year millions of boomers will begin to retire and begin to drain what ever credit is still available. The politicians will do what ever the boomers want (more entitlements) in order to get elected and the will ignore the systematic risks until the system crashes.
This not the first time you've asserted something which is exactly opposite to fact. I refuse to try to carry on a debate with a liar. Goodbye.
Corruption it a secondary issue, which shouldn't be used as an excuse to do nothing. As long as the bulk of the money is used to build the infrastucture, it will work.
It would have to be done in a series of steps over time.
Say over 5 years (pick a number between 3 and 8)
This would give people time to adjust, reduce engine capacity, change vehicles, move etc.
Also, to make it palatable, the tax should be hypothecated / ring fenced for public transport esp in exurban - urban areas. BUT: any such projects should be started straight away. You would need physical evidence that projects were actually starting and not just on the drawing board: Light rail, trams, bus services.
It would be the toughest set of choices that the US will have ever made since the American Civil War.
But first you will need Leadership...
Oil went up about $30/barrel between summer 2004 and summer 2006, with no serious effect on the economy. At that $15/bbl/yr rate, phasing in this tax would take 8-9 years, assuming oil stayed at a constant price (which the tax would probably help to ensure).
It could be done faster (given sufficient political will), but evidence suggests that a $15/bbl/year rate of increase -- about 2.5 cents per gallon per month -- should be a relatively safe rate for the economy. (Except for the GM and Ford part of it, of course.)
Ditto. How many TRILLIONS are "missing" from the Treasury? The cronyism and corruption in WA DC makes the Sopranos look like a bunch of kindergarten bullies.
"I think taxes need to be levied, but at the state and local level where there's much greater accountability and transparency and citizen input as to how revenues are spent."
Yes, transparency will be greatest at the local level. Westexas has the right idea with his re-localization mantra.
IMO, reforms that have the best chance of providing long-term solutions and a basic quality of life will only come from the bottom on up, not the other way around. We should put the vast majority of our energy into grassroots community-based reorganization.
There must be hundreds of aquaparks and similar projects dotted around in the norwegian kommunes (counties). Hardly anyone visits them, they are spectacularly unprofitable and they usually go bankrupt within two years, taking the loan guarantees with them. And who profits? The entrepreneurs who build them - who usually have buddies in the local council, if they don't sit there themselves.
A solution (Heh, The "William" Solution):
Set a price for gasoline (and other fossil-fuel based transportation fuels), based on what the economy can support while curbing consumption. Make it so that the price increases over time (as the economy allows & as minimizes consumption).
Levy a tax at the beginning of each month. The tax would cover the difference between the lowest priced retail-gasoline & the afore-mentioned target price. (For instance, the lowest price is 1.50, the target price is 3.00, the tax would be 1.50 for the next month). This keeps the market competitive while minimizing price variance and allowing companies to count on the price of gasoline decades into the future while keeping the tax from magnifying spikes (if the retail price went up to 2.98, the tax would go down to .02).
Because the income from said tax would be fantastically undependable and the government doesn't need that much money anyway, all the money would be given back to the consumer on a per-capita basis. At the end of every year, the revenue (minus some of its interest to pay administrative costs) would be split up amongst all US citizens of 18 years or more and mailed to them.
Thus those that consume more than the per-capita amount of gasoline would be punished, those who consume less rewarded, and everybody would hurt enough when they went to the gas station to make the development of alternative fuels & the purchase of higher mileage cars very attractive (especially because you know the price won't be getting any lower).
If you want to get really fancy, you can refrain from giving back the money, instead putting it in a special account from which they can only extract money to buy non-fossil fuel consuming products, creating an enormous market for alternatives, but that sounds incredibly complicated.
The problem I see is that the for too many Americans our social awareness is seperated from our individual lives. So, the same person can be aware of the pending problems with oil supply and in the very next breath complain that <insert favorite scapegoat here> are responsible for high gas prices or for not reducing prices.
So, please save the planet, but I don't want to pay for it.
This is what we need to work on. As someone said a few days ago, we have to get past this. We need to understand why there is zero chance, and address that to the satisfaction of most people.
It is too important an issue not to waste my time on. Even if there is a low probability of success, I consider it one of the sure-fire ways of mitigating Peak Oil. Therefore, for me it is worth exploring the issue to see if we can come to a compromise that most people can live with.
I don't dispute your sentiments, because I have found them to be true. But, I have also found that almost every person that I discuss this with one-on-one agrees that they personally could live with this arrangement. I am not talking about Peak Oil aware people here. I had a meeting with a group on Friday night in Palo Alto, and I passionately argued the case for higher gas taxes. I think I convinced the fence-sitters that this is a workable, and much-needed solution.
Whoever puts in the gas tax will be considered the devil, and their party along with them - look at how Jimmy Carter was treated for being reasonable about energy.
This isn't a Weight Watchers meeting, this is a drunken oil parrrrrrty!
It's that last part that's the key, since most people are going to believe that they're going to profit from it because they think they use less than everyone else.
There may be some semi-affluent people that will squawk because they know it'll affect them, but the wildcard is probably the bajillionairs who may find it against their business interests. Since the bajillionairs weild much money, and thus political influence, some kind of carrot may have to be devised for them.
Perhaps it would be more apt to say that one is "working against the basic pinnings of human nature."
Is there any country or people in the world that is really that much different in their attitude to the good things of life than the Murcans?
Murcan values are, in fact, the values of 99.9% of the human race: indoor jobs without heavy lifting, flush toilets, cheap gasoline, etc.
Do most people in the world pursue what they perceive to be "american values" - sure, but that doesn't make them "human nature," it only testifies to the global impact of western civilization. Are there and have there been other ways of organizing human society? Without a doubt.
We pay $6 for a gallon - and the living standard isn't lower than in America. Admittedly, our cars are not as big as american most cars...
Most Americans who have been to Europe would probably disagree. Probably most Americans who haven't, just don't care.
A friend of mine who actually moved to the U.K. for several years put it this way: "I keep forgetting Britain is a Third World country." (When she came back to the states and saw the way we live, or when American visitors commented on her small house, small fridge, lack of a car, appliances, etc.)
I was just about to write that. Most Americans haven't been to Europe, and probably couldn't find Switzerland on the map if you spotted them France and Italy. We generally have a severe America-centric view of the world.
I didn't realize how profound this view was until I moved to Germany, and watched German or British news on a daily basis. It gave me an entirely different perspective on the world.
And lately, American insularity has gone past the usual indifference, to outright hostility. Driven by the anti-"old Europe" sentiments of the current administration, perhaps.
Does it get any dumber than boycotting french fries or french toast? French toast isn't even French, fer crissakes.
Blasphemy! An uneven number of stars on the flag? Perish the thought! It'd have to be a territory.
Speaking of which...how many USAins actually know we have territories?
U.S. Territories and Outlying Areas:
Puerto Rico
Guam
U.S. Virgin Islands
American Samoa
Northern Mariana Islands
Midway Islands
Wake Island
Johnston Atoll
Baker, Howland, and Jarvis Islands
Kingman Reef
Navassa Island
Palmyra Atoll
Different is not the same as it being lower. Smaller houses don't really count as a lower standard of living either. That's just one of the assinine "American values" we have, absurdly oversized McMansions with one or two people living in them. Do people in New York city have a lower standard of living because they have more cramped living space?
Probably most Europeans would say our standard of living is lower because we work longer hours, have to pay outrageous sums for health care, have little social safety net, etc. It's all a matter of perception.
But the key issue is which sort of lifestyle is more sustainable. Is the American or European model better for an energy scarce and energy expensive world? I think the answer is clear (granted Europe will still need to work at it a bit more). Whether American lifestyle is better or worse is irrelevant, it's too energy intensive and thus unsustainable.
Revenue neutral is one thing to explore. Allocating the proceeds such that the local governments have control over how it is spent is another.
Copy of my e-mail to the editorial staff follows:
"those who believe that we can ? an infinite growth"
"those who believe that we can have an infinite growth"
I just saw this quote from Big Al on Raw News:
The former Vice President also called for a "revenue-neutral tax-swap," eliminating all payroll taxes in exchange for pollutant taxes.
He says he's been saying it for years. I guess I need to watch more MSM so I can be up-to-date on these things.
As everyone knows, I personally like scrapping the entire Payroll Tax, replaced by an energy tax. In contrast to the conventional wisdom, I've always thought that this issue--properly presented--was potentially a winning political idea.
Gore calls for elimination of payroll taxes, CO2 freeze
Published: Monday September 18, 2006
Excerpt:
http://www.energybulletin.net/17009.html
Has oil peaked?: Yes
Published on 10 Jun 2006 by Dallas Morning News.
Archived on 11 Jun 2006.
by Jeffrey Brown (With Alan Drake & Bart Anderson)
Excerpt:
The cultural winds are indeed blowing in a new direction, and politicians will sense the change and go that way or be left behind for those who will.
No, I do not think it will be an easy shift to make in our culture or our politics -- we need to continue to work to educate and demonstrate the need for change and the very real solutions which we can start implementing right away.
If Gore and Clinton will put their shoulders to the wheel, they can lend tremendous momentum to the "Carbon Cousin Causes" of Peak Oil and Global climate change.
Grassroots efforts (like TOD) and political efforts could bring about some big changes and positive suprises.
I think we could get to a $2.00/gallon gas tax over a year or two, and switch some additional tax burden to coal and NG as well.
Gore is on track!
One argument is that a high gas tax or high carbon tax will hurt the economy. People like Amory Lovins would disagree and make a very good case in books like Natural Capitalism that incentives to cut carbon would help, not hurt the economy. We all need to address that issue and demonstrate the benefits, not drawbacks of a high tax.
It is the middle and lower classes which have not benefited from our so called fabulous economy. If we create a new economy based on low carbon use and redistribute some of the income that has gone to the top 1% of our economy under the Bush years, we can make this a positive experience for most people.
Of course there will be winners and losers associated with any change. But I still think there could be more winners than losers and that a radical change in our carbon use could be an exciting time, especially for young technically oriented people coming down the pike.
It used to be that the way to create excitement and purpose was war. War isn't cutting it lately. All it has helped create is cynicism and despair, much of which is evident on this site.
This is one I will share with interested friends and other open-minded people. Thank you.
Actually, I think Gore's approach makes more sense. To just focus on transportation is to ignore sectors with major impacts, like housing, for example.
I think a great idea would also be to, say, increas the gas tax but then have a standard deduction on folks' income taxes that that is equal to what an average person would pay over the course of the year. Folks who drive less than average would actually make money. Folks who drive average would break even. Folks who drive more than average would pay more. This deduction would be recalculated every year in order to ensure the average was getting smaller and smaller.
The problem with a cut in the payroll tax is that the AARP would strenuously object. They get ballistic at anything that might affect social security funding. Moreover, retirees who do not work would not benefit from a cut in the payroll tax, but they would be hurt by an increase in the gas tax.
Unless we can find a way to get the AARP on our side, this isn't going to fly.
But we handle that now by giving them an earned income credit. You could give everyone a gas tax credit, and give the majority of the benefit to those making the least money.
Unless we can find a way to get the AARP on our side, this isn't going to fly.
I hadn't thought about the AARP. It might be nice to open up a dialogue with them and see if it could be sold to them. They have children and grandchildren, so it should not be hard to stress the importance of this. The exception will be the childless abiotic oil advocate and global warming denier, but that is probably a rare combination.
OTOH taxes have a way of working themselves into everything we buy including services. How much would a fossil carbon tax raise nat gas and electricity rates. That's why I favor rationing and import quotas instead of taxes.
The problem with import quotas, is that it will have an unpredictable impact on prices. They could spiral much higher. And rationing takes choices away from us that the average voter is not going to find appealing. I think a gas tax/tax credit is passable because most people are going to believe that they can conserve a bit and be financially better off.
Do you see how you defeated your own statement, which is a great untruth?
When I was poor, I paid SSI and SDI taxes, gas taxes, sales taxes, excise taxes, property taxes [through my rent], and income tax; never was poor enough for food stamps or applied for unemployment "insurance."
The myth that the poor pay no taxes, that there were many "Welfare Queens," is no more than Right-wing wedge issue proaganda made credible by the echo of corporate media.
Sure it does. That's how the earned income tax credit works. Even people who don't make enough to pay taxes can get a tax credit, which they get as a tax refund (on taxes they never paid).
Having the gas tax credit work exactly like the # of dependents deduction makes it easy to administer. Everyone gets the deduction, rich, poor, drivers, non-drivers. That's how it works to reduce miles driven.
Of course, that only applies to the working poor. Non-wage income does not incur those taxes.
They (we?) may not pay much income tax, but SS and Payroll taxes as well as all of the sales taxes and state fees combine to confiscate a substantial percentage of many a poor earner's income. Indeed, the lack of resources and education about tax preparation mean that many overpay or fail to get refunds and earned income credits.
That said, despite their lower rates of taxation, the poor and their labor facillitate higher wages for others.
Granted, you were speaking of the "really poor" but there are alot of so so poor too.
I don't consider myself 'really poor'. Not even poor.
I am retired and the execs stole my pension and promised benefits(so they could drag home millions)....30 yrs of working in IT.
Yet I don't pay any taxes. There are many like me. In my state they do not tax pensions(what little I get).
In fact I can make quite a bit before I have to pay taxes , either federal or state.
Yet we all sit around stating how bad it will be when gas gets so high that our economy tanks and now RIGHT HERE its being proposed to push it to that level.
What the f**k???????????
What I would is an all out assult on photo voltaics.
I am an electronices technican first and foremost so I belive in PV and the nano technology looks promising.
Being able to place panels and cover your entire roof seems to me the best idea yet.
There are problems to be worked out but that would be where I would put the emphasis. Maybe its too late. Maybe anything is too late.
I think taxing the shit out of gas is not a good idea.
I asked a few folks yesterday at what price of gas would we (our county) go belly up. $6.00 seemed to be the answer, even though I suggested it.
I was then told that for the last 8 months many businesses are not doing well at all. Primarily this was the hair dressers who have seen a 50% drop in receipts. From $700 a week to $350 or so per week.
In other words the energy crisis is already here in the flyover...at least my area.
I'm for oil import tax, rather than a finished gasoline tax. The US has huge unsustainable trade deficits (see today's news) to go along with our appetite for petroleum.
I'd be happy with an across-the-board tariff on imports. Perhaps selective rates of tariff on imports from countries which don't allow trade unions, freedom of speech, minimum wages, environmental protections, etc. The Fucked Country Import Tax.
I think the US should can their auto emissions and safety regulations and adopt European rules -- forming an ISO standard if there isn't one already. Small cars are not imported in the US now, and I blame weird US safety and emission rules which favor heavy, large cars.
I have kept an eye out for delayed start dates over the past years to see who are the experts. TOD posts immediately after the huricane appear to be more accurate than the quarterly revisions by the owners. This is why I come to this site to get accurate data and assessment, not the most optomistic spin of bad situations.
Impossible to forcast gas prices unless you have a Holistic understanding of supply and demand of oil, which I don't yet.
I have no idea what the correct level would be, but given the relatively small demand response we have seen from the price fluctuations so far, I can't imagine that a tax of less than a couple of dollars per gallon would get us where we need to be, so maybe raise the tax 25 cents/year for 10 years. On top of the probable price increases over that period of time, it might be enough.
The other question is how to offset the hardship on the relatively poor. For the working poor, raising the zero-bracket amount on the Social Security tax would be easy and make sense. Raising the EITC would be another option. I am not sure how to compensate the elderly, disabled, and non-working poor. In the hypothetical world where any of this could happend, some of the tax money should be diverted to transit projects which would benefit them. I am not sure there is any feasible way to compensate the rural, non-working poor. I suppose some kind of gasoline analogy to food stamps might be possible.
By graduating the tax over a period of years and informing the public of a steady increase, it would provide the public the ability to adjust, and provide the market the oppurtunity to figure out ways to profit on the new industries that will arise out of it.
Also I think this tax needs to be a state/local kind of thing. I know someone brought up the Federal Highway funds, but the whole point of this idea is to reduce driving and therefore reduce the need for a federal highway. State/County/City tax structures could take this money and use it for transportation initiatives internal to the province administering the tax. This could include roads, but preferrably, a federal matching program of some sort which would match non-road based initiatives would be more productive and place incentive for local governments to build alternatives. i.e. if Houston spends a million on rail, the Feds would match a million or some percentage of.
(As an important aside, the matching funds initiative would allow the federal government to keep their baseball bat at hand when they need to force states on certain issues. Highway funds currently serve this purpose, and if you are looking for political angles to push, this is one the Federal Government would want. The ability to tie highway funds to things unrelated like Education and Healthcare bills have been a major tool in Federalism. I know its an unpopular concept in these forums, but RR wanted points for a sales presentation, and know the customer, this would be an appealing factor.)
As for the tax refunds... absolutely not. Again a graduated tax introduced over a slow period would allow people the ability to make adjustments. But we are trying to get drivers off the road, and the poor and middle class make up the most numbers of drivers. Sorry but treat them all the same, and no refund. Its incentive to change their ways, poor, middle, or rich.
I understand this is a pinch on a lot of families, but the slow progression of a gradual tax will be way more merciful to them, than a sudden economic event caused by more spikes in oil prices. That benefit alone should suffice for the poor (and for everyone for that matter), because ultimately in the end the poor just as much as the middle class or rich need to be weened off gas usage. Besides, those refunds would be more useful in the form of infrastructure based around alternative transportation, which would benefit the poor, middle class, or rich, all equally.
"An ecotax has been enacted in Germany by means of three laws in 1998, 1999 and 2002."
More in http://en.wikipedia.org/wiki/Ecotax
I think it would be easy to administer and
would encourage the desired social changes ..
RE: Gas Tax
Here's my idea ..
I believe that there are 6 or so pricing
districts for wholesale gasoline prices
nationwide ..
Fix state and federal taxes as a percentage of the
wholesale price per district at say 15% for the
state and 15% for the Feds ..
Adjust the district price weekly per market forces
Give each licensed driver a national gas card
that must be presented at point of purchase
good for 500 gallons at whatever your district
price is .. Tax additional consumption in
100 gallon increments by $1.00 gallon above
your district base price ..
If base price is $2.00
then with taxes price would be $2.60
So, under my proposal each licensed driver
would pay as follows ..
0-500 gallons @ $2.60/gal ( weekly price adj )
500-600 gallons @ $3.60/gal
600-700 gallons @ $4.60/gal
etc etc
Gives all drivers access to fuel at market price
Encourages conservation and replacement of
inefficient vehicles .. Taxes excess consumption
and inefficient vehicles .. Places tax burden
on those most able to pay ..
Triff ..
500 Gallons @ ~20mpg = 10,000 miles.
I'm assuming this is per year?
And If I burn less then 500, I can refund the gas to the IRS for a tax credit in direct proportion to the tax.
If 100 gallons refunded = $100.
If 200 gallons refunded = $300.
If 300 gallons refunded = $600
If 400 gallons refunded = $1200
If all 500 gallons refunded = $2400
This should make the black market a lot less and really encourage conservation.
All additional tax revenues should go to Federal Rebate programs designed to help consumers switch to more fuel efficient appliances and devices. (Furnaces, Hot Water heaters, kitchen appliances, Solar Panels, High MPG vehicles, Etc...)
Plus allow the moving credit for any move that brings you within a 5 mile radius of your workplace or mass transit station.
Garth
Not saying I like the impact the US has on the world economy, but not liking it doesn't mean it doesn't exist.
I'd suggest a minimum pace of cost increases, say ramping $1 over a course of a year, for 5 years. If the cost of oil goes up, the tax only rises slightly to ensure a stready $1 pa rate. Otherwise if costs decrease, the tax take increases more markedly to keep the ramp up. Cost increases greater than $1 pa are allowed to play through.
Net effect is both a predictability to prices that isn't currently possible, and a rate that forces real action. You know that next month prices will be 8c higher, and again the following month, etc.
I would say that any numbers less than $1 are pointless, and that pressure has to be kept on over time.
He has been pushing a gas tax for a while. The 200+ comments are always fun to read as well.
In this particular one I highly recommend going through the poster HiD's comments. He's a trader and quite well informed.
"No one with a brain disbelieves 'peak oil.' Hubbert's peak is just math."
I'm still mulling that one over. What do you think? We could just ask him.
Until such time that governments can be open and honest with accounting, how do you expect people to support MORE to government?
In addition there are roadtaxes, insurance taxes etc. that increase the total tax burden.
The average fuel consumption of UK cars is 35 mpg. Average annual mileage is 8000-9000 miles for personally own vehicles, much more for company cars.
Something to take note of: because we are used to much larger tax levels on fuel, any increase in oil costs has correspondingly less impact in percentage terms. What would double the cost of fuel in the US might only result in 10-15% extra cost here - a lot easier to deal with.
Also, bear in mind that it's not just a question of miles driven, but also MPG. The difference between the UK's 35 MPG and our 20ish is massive.
This is particularly true when one realises that of 60 million people, about 50 million live in England whereas Wales+Northern Ireland+ Scotland is something like 65% of the land mass.
And a disproportionate slice of economic activity and population is still within 100 miles of London-- something over 20 million people and 40% of GDP.
Agree that the price of petrol plays a role in keeping our cars more efficient-- about half of new car sales are diesels. Still, one in 12 cars sold is an SUV, and in London 1 in 8 (our SUVs are mostly smaller than yours, but one sees plenty of Range Rovers/ VW Touaregs/ Porsche Cayennes etc.). A Range Rover would get about 12mpg in the city.
Public transport is better than many American cities (what a surprise ;-). But outside of London it is not comprehensive and I would say 90% of trips by middle class people are by car. Few cities have subways (Glasgow, Newcastle, London) and a few more have non-comprehensive light rail systems (Manchester, Birmingham, Sheffield (anyone see The Fully Monty?).
The story with light rail is familiar. A lot of the systems were badly damaged during the war by German bombing which hit town centres hardest. After the war the conventional wisdom was 'cars good' so a lot of the systems were closed down by their municipal owners and then replaced with buses.
As traffic worsened and incomes rose, buses became the reserve of the working class and poor, not the middle classes. Margaret Thatcher is alleged to have said 'anyone over 26 who takes the bus is a loser'. She was certainly very pro-car, inaugurating a massive expansion into out of town supermarkets and shopping centres, which has left the traditional English High Street looking threadbare-- charity shops, down at heel chains, pubs and restaurant chains.
Thatcher also privatised the bus networks outside of London. The result was a 'tragedy of the Commons'. More buses, with smaller loads, at rush hours, jamming the roads and increasing congestion. this makes sense from the marginal cost curve of the average bus entrepreneur. Outside of rush hour, fewer buses, therefore inevitably smaller ridership (longer waits for the buses) and so on in a downward spiral.
The real cost of taking the train or bus has risen by over 40% since the 1970s. The real cost of motoring has fallen by about 10% (taking into account insurance, petrol and depreciation and road tax).
So miles travelled by public transport has been almost static. London is something of an exception: Tube traffic has doubled since the late 1980s and bus traffic has just begun to revive (see below). On most of the major Tube lines, at peak times, capacity is now less than demand, and the system is crippled by constant reliability and security problems.
(another feature of the 70s and 80s in the UK was constant underinvestment in public infrastructure-- roads, school buildings, hospitals, public transport. The government is racing to catch up now, but there is a 30 year legacy to reverse)
In the late 1990s, traffic got bad enough that long distance rail has enjoyed a renaissance. Something like a 50% rise in passenger traffic since the mid 1990s. However, again, the system is near capacity. Freight rail operators have been rationed due to the demands of the commuter system. major commuter stations like Waterloo habitually operate above their theoretical passenger capabilities.
About 90% of UK freight traffic now goes by road.
Another feature has been the steady decline of walking and cycling. Cycling was once as much as 20% of all journeys (90% of all journeys are still less than 5 miles). It is now around 5%. Over 90% of UK children are driven to school (by parents or by bus), less than 10% walk or cycle. As the roads have fewer cyclists, it has become more and more unsafe to cycle.
One positive feature of public transport has been '4% intermodal shift, car mode to bus mode' in London since 2002. This is unprecedented, worldwide, in the history of transport. The middle classes have again embraced the London bus (despite the end of the famed Routemaster conductor bus, phased out now except for tourist runs).
This was achieved by the ex-Trotskyist mayor, Ken Livingston. Thatcher had gone so far as to abolish the government of London in 1981 and sell its headquarters to a Japanese property developer, she hated 'Red Ken', then chief of the Greater London Council, so much.
The Labour government reinstated the Mayor of London, and despite their best efforts, 'Red Ken' won again.
In 2002 he imposed the London Congestion Charge. Now £10 ($18) to enter the core from 7am to 7pm M to F. Disaster was predicted: a campaign was orchestrated in the leading tabloid newspapers (circulation over 6 million) to prevent it being brought in.
The result was an almost immediate drop in city centre traffic by about 15%. Road speeds increased by a similar proportion. Daily life continued as usual.
And Ken pumped money into buses, leading to an explosion in the number of bus journeys, and the famed 'inter modal shift'.
He hired the ex CIA, former head of NY Transit, Bob Kiley, and sued the government to prevent privatisation of the London Underground (Tube/ Subway) by Blair's government. He failed, and we are now paying the consequences of the failure.
But Ken has shown us that radical action can, indeed, change things. But you need to have political courage-- his actions have been almost Churchillian (and he has Winston Churchill's character flaws).
Unless there is a crisis, I don't see that kind of leadership emerging at a national level, in the UK, US or Canada. In fact in Canada, Tom Harper thinks global warming doesn't exist, and the global warming and renewable energy sections of the government websites have been taken down.
A phased-in tax starting at a dollar going to at least three
over the course of a couple years. But the bigger question is how to distribute it so that it best goes to
1)efficiency including mass transit
2)alternative fuels
3)helping those transition who are hurt the most
The greatest problem with a gas tax is that it instantly brings up the problem of our broken and corrupt politics and government. It necessitates looking at how we reform both, for example not a penny should go to DC bureaucracies. What's post-oil politics and government look like, becuase oil has been a big shaper of the mess we got now?
Of course in the real world of US politics any such MPG surcharge would be based on "fuel economy within class of vehicle". Just like a single-occupant hybrid SUV is allowed in some high-occupancy lanes while far more efficient small non-hybrid cars are not. Oil is finite but stupidity is infinite.
Agreed, but taxing based on fuel economy would eliminate a lot of new low mileage vehicles fast. A buyer would know ahead of time he was going to be penalized for buying one, what the penalty would be and in many cases (most I hope) choose a vehicle without an embedded tax penalty. There would be no discrimination between hybrid and non-hybrid vehicles. There would still be plenty of used vehicles for those needing hauling power for a few miles per year. Why would someone want to buy a new vehicle for this purpose anyway? I was trying to think of a transition mechanism to not penalize the poor. After 10 years I would go with a straight mmpg tax. By then I assume there would be plenty of used high mpg vehicles available for those who couldn't afford new ones. I think a gas tax with an earned income tax credit would be more difficult to administer.
We don't have 80mpg: not even in Imperial gallons (one fifth larger than US gallons).
London has a small number of all electric runabouts
www.gwhiz.co.uk -- but not suitable for highway driving.
Peugeot has a 70mpg diesel hybrid, not on the market yet, but since it has effectively 2 expensive engine technologies (diesel and hybrid) it will cost $5k more than its comparable petrol engined counterpart, when and if it is released to market.
http://www.greencarcongress.com/2006/01/psa_peugeot_cit.html
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PSA Peugeot Citroën Unveils 69MPG Diesel Hybrid Prototypes
31 January 2006
One of the pair: the C4 diesel hybrid.
As promised, PSA Peugeot Citroën unveiled two prototypes featuring diesel-electric parallel hybrid powertrains, the Peugeot 307 and the Citroën C4 Hybride HDi.
The hybrids deliver average combined city and highway fuel consumption of 3.4 liters per 100 kilometers (69 mpg US), with 90 grams of CO2 emitted per kilometer--a tank-to-wheel record for compact cars, the most popular segment in Europe. This is about 25% better than a similar vehicle equipped with a gasoline hybrid system, or as much as a liter per 100 kilometers in combined city and highway driving.
Hybrid technology using a petrol engine is not very competitive financially, and does not offer significantly better fuel economy or CO2 emission performance than a conventional HDi diesel engine. However, PSA Peugeot Citroën believes that combining a hybrid powertrain with an HDi engine would constitute a step change in terms of improved fuel economy and lower CO2 emissions in Europe, where diesel engines are already widely used
Gasoline may turn out to be a very effective and useful future for ten more years or even more, in some scenarios. Even Peak Oilers would agree that if we fall into a serious and long-lasting recession/depression, and if it also turns out that world oil supplies are near the top end of the estimated range, our oil supplies would be adequate for at least a decade and possibly much more. In that situation, putting on a gas tax now could be a mistake, dragging down a struggling economy and reducing the economic growth that ultimately fuels research into alternatives.
Furthermore, a gas tax is unnecessary if and when oil starts to be in short supply, because supply and demand will drive up prices, probably much more than any politically feasible gas tax. And this won't just happen at the peak, it will start happening as soon as people become convinced that the peak is coming in the next few years. Such a belief would drive up futures prices, which due to the storability of oil will drive up present day prices.
Much of the sentiment among Peak Oilers for a gas tax is really due to frustration that people still don't believe their story and so the market price is not climbing the way it should. Well, if your story is so unconvincing that market investors and the general public aren't buying it, you're not going to succeed in getting the government to put in a gas tax, are you? The real problem here is that near-term Peak Oil is still just a theory, one which has not yet persuaded a critical mass of the public. Calling for a gas tax skips over the hard part, which is making the theory more believable. And once that's achieved, prices will climb anyway due to market action, making gas taxes unnecessary.
In general, government intervention only distorts economic incentives and produces less than optimal distribution of society's scarce resources. This is a fundamental theorem of economics and should be used to judge any proposed tax. However, there are important exceptions. One is in the case of externalities, costs which market activity imposes on other people. A classic example is air pollution - a rubber factory may put out chemicals into the air whose costs are born by the neighborhood, and not by rubber sellers or buyers.
To minimize social costs, taxes to address these kinds of externalities should be set, as precisely as possible, to equal the total costs of these externalities on all the people who are harmed by them. In the case of gasoline, the main externality being considered today is global warming. In that context, we should not be looking at a gasoline tax per se, but at a more general carbon tax. Estimates of the cost of CO2 emissions vary, but a widely used benchmark is $100 per ton of carbon. That's the high end of the range of analyses I've seen but it is at least arguably justifiable. This would correspond to about twenty cents per gallon for a gas tax. Such a tax would make economically sense.
Another exception comes if the government is subsidizing an economic activity; such a subsidy is an artificial stimulation, and could appropriately be countered with a tax. For example, much of our current gas tax is used for road construction, a government activity that subsidizes driving. However as we have seen from experience, finding this kind of balance and maintaining it is politically almost impossible.
Many government activities have been interpreted as indirect subsidies of oil usage. Some argue that the whole cost of the Iraq war, or even of the entire U.S. middle eastern foreign policy, should be counted as a subsidy for gaoline. But by some measures this can produce outrageous estimates like $100 per gallon; yet if the U.S. had no middle eastern foreign policy expenditures, we would obviously not be paying $100/gallon for gasoline (that would not be in the interests of oil producing countries). So this chain of argument doesn't really work. The bottom line is that it is very difficult to realistically estimate how much existing U.S. government activity subsidizes gasoline.
Summarizing, a carbon tax of ten or twenty cents per gallon is arguably justifiable to minimize the net costs due to global warming. Beyond that, taxes to compensate for subsidies should be OK in theory, but in practice the analysis falls into a quagmire of political debate centered on the motivations for the Iraq war, and it is doubtful that a meaningful figure can be assigned.
I would say that the real problem is that PO has not yet persuaded a critical mass of the scientific public.
For every thousand articles on global warming in the scientific literature, there is just one about peak oil (approximately, I haven't checked this).
When was the last mention of PO in Science or Nature?
To ask that question is to answer it. Campbell and Laherrere's landmark article in the Scientific American way back in 1997 appears to be the exception that proves the rule.
It's a pity, but without serious scientific credentials a theory is not going to be considered to be 'scientific'. The only way to obtain such credentials is to have one's contributions accepted for publication in scientific journals -- not just in the blogosphere or the mass media.
Nature, 11 days ago...
Solar energy: A new day dawning?: Silicon Valley sunrise
Oliver Morton1
Oliver Morton is Nature's chief news and features editor.
Abstract Sunlight is a ubiquitous form of energy, but not as yet an economic one. In the first of two features, Oliver Morton looks at how interest in photovoltaic research is heating up in California's Silicon Valley. In the second, Carina Dennis talks to Australian researchers hoping to harness the dawn Sun's heat.
====RELATED STORIES
Solar energy: Radiation nation
Resolving the energy crisis: nuclear or photovoltaics?
Leapfrogging the power grid
Applied physics: Solar cells to dye for
A power that's clean and bright
http://www.nature.com/nature/journal/v443/n7107/full/443019a.html
=
Science... 17 days
ENERGY:
Enhanced: A Road Map to U.S. Decarbonization
Reuel Shinnar1* and Francesco Citro1
Alternative energy sources could replace 70% of fossil fuels in America within 30 years at a cost of $200 billion per year.
http://www.sciencemag.org/cgi/content/summary/313/5791/1243
--------------------------------------------------------------------------------
National Geo...
6/04
The end of cheap oil...
http://magma.nationalgeographic.com/ngm/0406/feature5/
Future power....8/05
http://www7.nationalgeographic.com/ngm/0508/feature1/index.html
Well, Halfin, you certainly get us all thinking ...
I wonder if it is at all possible even to determine the 'optimal distribution of society's scarce resources', let alone achieve such an objective.
What is 'optimal' for a 20-year old with a life expectancy of 75 is not what is 'optimal' for a retiree in his late sixties. The latter, if he has no children, may quite happily and rationally allow society to 'go for broke' -- after me the deluge.
That may partly explain the reluctance of politicians to plan for the future -- a growing percentage of their voters are so aged that they don't have any future!
So let's eat, drink and be merry, since tomorrow we die -- and we won't be around to have to clear up the mess we left behind us.
For me, it is not so much about taking some risk in the face of peak oil that might turn out badly. It is about implementing an intelligent energy policy that will benefit society and the earth no matter what turns out to be the case with peak oil.
If we have to prove peak oil before pushing a gas tax, or simultaneously, we're screwed. It's just not the right strategy. And I've seen many economists and journalists make the case without ever bringing up peak theory.
Yes, you are correct. It is highly likely, that the market will eventually push up prices that will make a tax unnecessary. That's excactly what I'm trying to avoid. The higher the percentage of the price that is tax, the better. It works all around the world. It dampens effects on the retail price from rude swings in the underlying crude oil.
I know I've got a plan.
Anyway, I pretty much agree with everything else you're saying.
Those of you reading this in 2007 will be aware that the US is now in recession. Having low gas taxes didn't protect you from that, odds are they made it more likely. Had the US introduced an escalating gas tax (let's say 2 to 3 cents / month) in late 2001 in response to the WTC atrocity I would bet that the WTIC price now would be about $40 rather than $64.
It is significant that UK petrol ( = US gas) prices have moved in but a 10% range over the last 18 months, whereas US prices have had a 30%+ range in that time.
Where Halfin sees the ability to price in the externalized costs of carbon emissions, I see that the atmospheric levels of greenhouse gases are beyond any seen in ca. 1 million years or more and have increased at a rate about 1000 times above any previous measurements. With that kind of assault on climate and ecosystems literally anything goes in terms of rapid, unforeseen, catastrophic changes that may make life untenable for millions or perhaps billions of people. There is no way to calculate in dollar terms this kind of scenario.
This is a major difference between what is called environmental economics, which is an extension of neoclassical economics attempting to internalize externalities, and ecological economics, which says that ecological systems are too complex to understand in full, prediction of change is imprecise, externalities impossible to calculate, and so the precautionary principle needs to apply. The proper role of the market is dramatically shrunk in this perspective.
What some people see as "the free market" I see as "the suicide economy."
We are burning up the real "capital" we have -- if we can use the capitalist paradigm for a moment. When one uses up one's capital(the planet), one goes bankrupt.
I see real capital as carefully husbanded resources, including human labor.
Real wealth is created when we labor to create food, shelter, clothing, or other things that enrich our lives without depleting the capital of the planet we inherited.
We do not create so much real wealth these days. We make plenty of junk by depleting resources and spewing toxins into our nest.
We are actually making ourselves poorer while pretending to get rich.
Economic suicide ends in a game of "Last Man Standing." The winner gets to die anyway, because resources are depleted and the toxic wasteland will be inhospitable.
Now I will try to cheer myself up by commenting with regards to the gas tax:
I think that a concerted effort on the part of grassroots and political activists could get us a $2.00/gallon tax pretty soon.
If the likes of Gore and Clinton can use the bully pulpit of their political status, and if Democrats will really face the real ***Inconvenient*** issues, there are a few Republicans who would join in.
Combine the political strategy with a real grassroots movement amoung environmentalists and those concerned with building a new, sustainable energy infrastructure, and the tax may be seen as a way to revitalise our economy by employing folks to work on sustainable energy projects from Transit Oriented Development to Continuous Productive Urban Landscapes to Green building.
Not at all impossible. We may see the cultural winds blow politicians in a new direction.
The main thing is to develop some rational targets and to keep talking about why we need change and ways to implement very real solutions for the very real problems.
I'll point out that here in Maine gas tax is constitutionally required to go to road work. Another concern I have with it, the PTBs would simply reduce other taxes. But the biggest issue I have is fairness. I don't think fairness should be administered via the tax system and tax credits. The powerful own the system and it will not be fair.
I'd like to see an initial investment in public transit, and then increase the gas tax big time in places that have it. The gas tax would have to be imposed by local communities, not by state or fed, according to local transit mix. Of course, a driver would just skip over and buy gas elsewhere. All sorts of practical problems.
Reward people without cars. Everyone gets gas tickets, allowing them to purchase x gallons of gas. Don't have a car? Sell it. If you don't have a ticket, then the tax is way higher, so much higher that the tickets have real meaningful value. That amounts to a real cash credit for those not using gas, paid for directly by those who want more.
Other things, like tax policy, so as to destroy parking lots.
cfm in Gray, ME
It is unlikely that local gasoline taxes could be substantially different from those of nearby communities and still be effective (take in money and keep the stations open).
US Federal gas tax does provide money to the mass transit trust account.
Step one of increasing the federal gas tax requires changing the percentage going to mass transit account.
Step one for increasing (many of) the state gas tax is to modify their constitution(s) to allow funds to be used on mass transit issues.
It's a sham anyway, it just sounds good. I'll demonstrate.
Pre gas tax:
Money from General Fund going to Road, etc: $4 million
Post gas tax:
Money from Gas Tax going to Road, etc: $4 million
Money from General Fund going to Road, etc: $0 million
Just a shuffle. They can now spend the extra $4 million on pay raises for themselves for shnooking the citizens, because technically the money from the gas tax is going to road contruction and whatnot.
Encourages two of my three pet taxes, carbon and security(leaves out depletion), but it advocates massive wealth redistribution - we simply pour all the money into a fund and then dole it out equally to every American taxpayer annually.
It's the only MAJOR (major enough to affect consumption) tax I think is politically possible - the bottom two quartiles of Americans who don't use as much energy would get money in their pockets.
They would also presumably reproduce more rapidly, thanks to that 'extra money', and the patter of more little underclass feet would merely accelerate our rush to the abyss.
Remember the law of unintended consequences? I certainly wouldn't bank on 'massive wealth redistribution' having any positive impact on society.
The folks in my working-class-and-poor, racially-mixedneighborhood are well aware of the need to seek education and to put off having kids and also limit the number of offspring!
I think that the unintended consequence of which you speak might be overstated!
I voted $1.00/gallon--I have a small scooter and a bicycle to compensate for the increase. Bring it on! Make all this money raised go strictly to mass-transit, bicycle paths, and rebuilding RRs: put AlanfromBigEasy in charge at DOT, he will cut the bureaucratic crap. No earmarking for any pork allowed. Tell Ford and GM to put their employees back to work building the equipment for this transportation shift.
Pick one city to be very quickly relocalized so the rest of the world has an inspirational model of how it can be done. For example, take the Asphalt Wonderland of Phx. We have weather that would allow relocalization construction to proceed year-round. They could build a massive spiderweb of bicycle paths very quickly. The high fuel cost would force most inhabitants to busses, car-pooling, and scooters leading to a rapid decrease in road congestion until the mass-trans infrastructure was completed. This would allows us to tear up all sorts of concrete and asphalt to restart urban permaculture.
If boat-shipping is 10 times more energy-efficient than RRs, we can extend the hundreds of miles of canals already here in Az for bulk loads that don't absolutely, positively have to be moved quickly. This will greatly reduce big trucks rumbling around.
I believe AZ is in drastic Overshoot: abolishing Air-conditioning and forcing everyone to swamp-cooling will make a lot of people move elsewhere first. This energy savings alone could easily power the electrified mass-transit and RRs with no additional building of power plants. This mass exodus of the wealthy would facilitate the scale and speed of the relocalization for those that remain because all sorts of materials could be recycled from abandoned buildings and homes. Having those wealthy people [with the largest energy footprint] leave early, means that the new urbanism can concentrate on walkable density and very small living quarters saving even more energy going forward. If >75% of Az inhabitants moved elsewhere, then our habitat could rebound quite quickly because we would not need to continue to drawdown our acquifers.
Ok, this is just a brief proposal and overview, many details would need to be finalized. Nonetheless, I still think converting the Asphalt Wonderland to the Permaculture Wonderland ASAP would be very inspirational to the rest of the world as an example of detritus powerdown and biosolar powerup. If all this money from the $1/gal gasoline tax was funneled directly to AZ--could this transformation be done in five years?
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Ahhh, but tax law punishes you for having stock. So now people expect oil to be burned to move items into stock.
For such a vision, holding inventory needs to change also.
Actually, I beleive if the inventory is "in transit" it is not considered in stock.
Spag's, one of the very first discount retailers (in Shrewsbury, MA) effectively utilized this loophole for years by owning their own trailers. They would pick the merchandise up and then leave it IN THE TRAILER in their parking lot until they were ready to put it on the shelf.
Garth
It's a shame that the daughters destroyed the business.
I think this is a misunderstanding. Maintaining high inventory levels requires the use of capital. The stock market rewards efficient use of capital and punishes excessove investories. This is part of what has led to supply chain managemnt and just-in-time manufacturing.
I don't think tax law has much to do with it.
Go read the tax code.
I think this is a misunderstanding.
Show where the claim of "the tax code charges you for your inventory" is wrong then.
The stock market rewards efficient use of capital and punishes excessove investories.
And at the moment, the cost of bringing more inventory to the business is cheap due to cheap energy. When the transportation costs rise and stores are still taxed on inventory...how do you think things will play out?
I don't think tax law has much to do with it.
The tax law is what motivates me from carrying inventory.
I'm not attacking you. I would genuinely like to get an answer on this as I have heard it stated before. I don't think there is anything in the tax code that penalizes inventory.
Before reading this reply, I thought you might be able to enlighten me. Now it sems pretty clear you just made that up. Then it seems you are shifting to saying that even if the tax codes doesn't penalize you, future energy costs will. OK.
So, let's try one more time. How does the tax code penalize inventory?
Go read the tax code.
http://www.irs.gov/businesses/small/industries/article/0,,id=100355,00.html
"Valuing Inventory
The value of your inventory is a major factor in figuring your taxable income. The method you use to value the inventory is very important. Generally there are two methods for valuing inventory. These methods are cost or lower of cost or market."
Even the IRS agrees on the importance.
Then it seems you are shifting to saying that even if the tax codes doesn't penalize you, future energy costs will.
You (and consumers) get hit 2x times. 1st time is an inability to "buy in bulk" to push up your margins (discount on a bulk buy) and the 2nd time is the shipping cost (inability to fill a truck, share a truck-barge-train, and the need to satisify the 'want/need it now' consumer via air shipment).
Then show that to me in the US tax law.
Just posting to hear what's up. You got internet access? What's going on?
In an earlier post, I suggested $1 at the pump, up from the current federal number, as a reasonable tax to levy on gasoline. I'll stick to that here, but with the proviso that it should be defined as motor fuel, that is, gasoline (including aviation gas), diesel and ethanol. The receipts should earmarked in an ironclad fashion for local and regional public transit -- mostly electric. NO NEW ROADS OR INTERSECTIONS, except such that woud facilitate public access to new or existing transit facilities. Think here, commuter/shopper parking lots and protected bicycle storage.
I am generally not in favor of mitigation that involves complex details, especially a scheme that uses the income tax. Some will fall through the cracks in any case, but a tax credit for those who would need it the most, if they do owe the IRS probably can't wait for next year's refund. One kind of indirect mitigation that might pass muster would be to couple the gas tax to a minimum wage increase to $7 or so. Mainly, the concept should not be encumbered with details.
-- Mort.
The revenues must be evenly divided between public transportation initiatives and an X-prize type competition for renewable transportation solutions. The prizes would be awarded 2 or 3 times a year.
There would be different categories for concepts, prototypes and finished systems.
The taxes must be phased in very gradually and predicatably, say adding 5 cents/gallon every 3 months to a maximum of $2.00/gallon
Despite enormous tax revenues - more than $1500 per citizen per year, which would equal 450 billion dollars a year for the U.S. - this money has not offset greenhouse emissions. (1) The country has gone from net exporter of hydroelectric 'green' power to a net importer of power from coal-based powerplants in Europe due to environmental 'ambissions'. (2) The average Norwegian car outputs about 30 pst. more than the European average. (3) The average car is more than ten years old, which makes it the highest in Europe, save Malta and maybe a few other low income nations. (Knowing that old cars emit as much as 200 times the level of NOx and CO as newer cars, I actually worry more about local pollution than I do about global warming right now.)
My point is that while gas taxes are the way to go, one should make sure that the money is invested properly in order to offset greenhouse emissions. Governments should not be allowed to tap into this vast source of revenue, neither should they be allowed to bias the selection of the best technologies to achieve the overall aim. Before any taxes are considered, make sure that the money can be spent wisely. Otherwise, as I have alluded to with my Norwegian example, the enormous cost may only empower politicians while doing nothing to the environment.
Raising the price of gas will drive down the resale value of inefficient vehicles. The USA has an abundant supply of these, used, enough for at least a decade and probably closer to two. The cheaper they get, the more attractive they look (hence the sales incentives for new light trucks). Would they become cheap enough on the used car market to offset the increased fuel cost? A dollar a gallon is just hundreds of dollars a year for a lot of drivers. The asking price for used, fuel-inefficient vehicles is already dropping by thousands. A zero sum game?
Yeah, but my gas guzzler gets 52 mpg. :-)
Just kidding, it doesn't. But the person who can afford to drive a vehicle that gets 20 mpg when gas prices are much higher may be the person who doesn't drive all that much. I usually put under 5,000 miles on a vehicle each year. If I could save thousands by getting a car that gets 20 mpg versus 40 mpg, I will be better off financially to do that. Bottom line: There will be a market for lower mpg vehicles, it just won't be people who use the most gasoline.
All those SUVs aren't going to shrivel up and blow away. They'll still be being driven ten years from now. They'll be cheap to buy but extremely expensive to operate. This is just the kind of trap that poor people fall into easily, because they are not able to store up capital. So they get things that are cheap up front but expensive in the long run.
Farmers would be especially against this, unless they got a much larger rebate than everyone else because of their higher fuel usage.
I admire the energy with which you pursue dialogue (in the face of such, dare I say it, hopelessness). Good luck.
To make a suggestion, I'd recommend that the gas tax be located well into the future at a well defined time. Some degree of conversion to efficient processes should be possible before the tax arrives. For example, introduce legislation in 2007 that implements a 30 cent gas tax in 2011, and becomes a $2 gas tax in 2014. Under this kind of arrangement, a significant portion of the costs to convert the economy are born prior to the introduction of the tax. If the near term peak oil thesis is correct, then these price rises are trivial, but they do force business leaders to initiate efficiency programs with a clear vision of the costs they will face. If the price of oil does rise enough by 2014 to make the tax unnecessary, it is reasonable that the tax increase would not be implemented. However, the hope is that the promise of a price rise by this time would have ensured active pre-emptive transition. A pre-emptive strike, if you will. So popular these days.
-- Mort.
What's the goal of the tax?
Are we trying to minimize fossil fuel impact on global warming?
Prevent a die off?
Preserve crude reserves?
Raise money for mass transit construction?
Here in Boston the MBTA is $8 billion in debt. Not exactly a front runner in terms of fiscally prudent management. I'm all for mass transit expansion, but I don't want to give this agency another nickel.
If we pass a gas tax in the USA, and it curtails consumption (thus reducing crude prices), who is to say China, or India, or other countries won't just start using more?
What we need is a Global Powerdown Treaty.
1% reduction in all fossil fuel user per year, every year, everywhere, globally.
Should I write a letter to the UN? :)
Garth
Are you aware of ASPO's Energy Depletion Protocols? Best Idea I seen yet, but TPTB resist it. They refuse to accept the Physics of Detritus Entropy and the nature-nuture of Population Overshoot--Jay Hanson's Thermo-Gene Collision.
"The best the poor can hope for is a quick and painless death"--Jay Hanson
That will be a large percentage of humanity, and many of us here unless global agreement is reached to optimize the squeeze through the Dieoff Bottleneck. Such is life, the choice of our decline is up to the collective "us".
Never forget 1,000 barrels/second + a newborn/second = disaster.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
1% reduction in all fossil fuel user per year, every year, everywhere, globally.
Should I write a letter to the UN? :)"
No need.
M. King Hubbert has written it for us already. It's a-coming.
Question is what we replace it with.
Today, raise gas taxes 2 cents/gallon/month with quarterly inflation adjustments, for 20 or 25 years.
Minimum current pain & economic disruption, maximum "structural change" will be pahsed in in anticipation of higher taxes.
Increasing the gasoline tax and/or putting punitive vehicle taxes based upon fuel consumption and spending these funds on mass transit severely punishes people living in small communities and rural areas as they have the greatest need to drive and in the case of rural people the greatest need for full size pickup trucks/SUVs. And those folks will not see any benefits from all the mass transit spending at all.
Raising the cost to produce and transport farm produce would work an increasing hardship on lower income people and any tax rebate program would not have any way to factor this in.
All of the current proposals for "Mass Transportation" are entirely for large metropolitan areas and therefore will provide no benefit for the people in the small communities and rural areas that are having to pay the large tax increases to support these.
The large metropolitan communities almost always have much higher income levels than those in the small communities and rural areas and the people in large metropolitan areas are therefore better able to survive any large gasoline tax increases. And the fact that people living in small communities and rural areas have to travel more miles for basic necessities (food, doctor appointments, etc...) compounds this inequity.
Raising gasoline taxes works against the small farmer and for the large farmer. There are no road taxes on "agricultural fuel" so they put dyes into all fuel that has not paid the Road Taxes. Large farmers use enough fuel to justify having two sets of fuel tanks - One for road fuel and one for non-road fuel. Small farmers cannot afford two fuel setups and so must pay Road Taxes on all their fuel. You do not want to be caught with any of that non-road tax dye in your carburetor or fuel injection system on your car or truck as the fines and penalties are very severe.
Reducing consumption in the USA will not have that great an effect in today's real world, as many times more increases in other parts of the world will consume any petroleum that the USA conservation efforts saves. Penalizing people here in the USA to benefit people in China, India, or other parts of the world in not in the best interests of the people of the USA (as separate from the Government of the USA). And the reality of reducing USA consumption not having any real affect on global consumption negates any beneficial effect on Global Warming. Only things that will affect global consumption are going to have any effect on Global Warming.
The attempt to raise the gasoline taxes and then give it back to the people is going to just create ANOTHER giant Government agency to suck more of our taxes into its operation. And because of all the side effects of the tax increases there is no way that it can ever be FAIR. The idea of taking in taxes and redistributing them by the government smacks too much of the failed communist doctrine of "From each according to his ability and To each according to his need". It simply is never fair and does not work.
Letting the laws of supply and demand work their way though the problems with Peak Oil and declining oil production is the best and fairest way to deal with the problem.
Yes, rural people use more. So we WILL either have fewer rural people OR they will use less. Farmers will use less fuel, and the non-farming rural population should move to where they use less oil. Retire to the city.
gas taxes only speed up the effects of Peak Oil, nothing more. But it allows us to make some preparations.
Your way leads to certain disaster.
Of course we don't have to speculate on this, we can look at what's happened. Europe has had high taxes for years and that has done nothing to limit American consumption; in fact they have gotten their gas cheaper because Europeans can't afford to buy so much.
You're right that the only system with guaranteed worldwide impact is high prices due to supply and demand. If Peak Oil is true then as more people become convinced of it, we will see supply and demand both be reduced. Suppliers will want to hold oil in the ground because they know it will be worth much more in a future era of scarcity; this will drive up prices and cause consumers to use less.
You are right about this, but who will be better prepared for the much larger price increases ahead; those who have been forced to develop efficient transportation systems by their governments, as the Europeans have or us free market SUV loving Americans. The capitalist cheap goodies now system we exalt has driven us to waste, obesity and disease. The effects of depletion are going to be so severe we won't have the time when it does come to react with a long term strategy. Without leadership and planning there will be great hardship. Our "let everyone do their own thing" cowboy attitude is going to fail us. We are moving towards a paradigm shift with the majority in denial.
If we act now, we can offer a carrot, by abolishing the Payroll Tax, and a stick, energy taxes, in order to start adjusting now to the much higher energy prices that are coming. I would argue that Europe is far more better prepared for Peak Oil--because of higher energy taxes--than is the US.
The US failure to buffer its economy against oil and energy price fluctuations virtually guarantees an increased risk of economic boom / bust cycles (more bust in the next decade, methinks).
Reducing comsumption in US will have several positive effects...
- reducing global trade imbalances
- probably reducing oil prices short term
- reducing $ available to possibly hostile govts
It is absurd to say that decreased US consumption would have no effect on global consumption and prices. A 5% reduction in US consumption would provide a year's growth in global consumption.Well put. Right on.
I appreciate your points, and don't want to invite the government to take any more liberties for themselves and from us.. that said, this administration has done just that, even being brought in by the people who most oppose government intrusion..
My main point, though, is a response to your issue of how much rural folk would be hurt by this, and only the cities would benefit. As proposed, by sending the revenues to MassTransit, you might be right, with the exception of Long-Range Passenger Rail.. but there is the question of how much the Rural environment is built up unrealistically on this accessibility of cheap fuel, which is a benefit that is now largely Enjoyed by these rural communities, which puts a constant demand on these fuels. The change will come.. how do we help the most road dependent Americans prepare and deal with this?
Bob Fiske
Many renewable energy, alternative transportation, and agricultural projects/businesses can receive investment capital through either government largess or private investors with carbon credits.
If the poor have lower emissions, they then have also have credits that have exchange value.
Another barrier to voluntary adoption of gas taxes is behavioral economics. People are loss-averse (a loss relative to some reference level is weighted more heavily in the calculation of utility than a gain of equal magnitude), and we choose smaller immediate rewards over larger rewards in the future. According to these theories, a distant future income tax rebate will not be considered adequate compensation for the immediate loss experienced each time one pays the gas tax at the pump.
And (for what it's worth), presidential approval ratings are correlated with gas prices.
Through all the emotional and otherwise driven words here, there is only one way to set the tax on gas: let it reflect the cost.
And that was set by Milton Copulos in the US Senate as $11 per gallon, $480 a barrel. Minus the cost per barrel for the producer, and there you go. It's really a very easy-to-solve issue.
Anything other than the real cost is nonsense, because you can keep on twisting around issues, and people will. Arguing with the actual cost is much harder.
BP thunder horse not operational till mid 2008.