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Raise gas tax to get more efficient cars
Paul Kedrosky
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Kai Ryssdal: Earlier this week the president announced tougher fuel economy and emissions standards for car and truck makers. The White House figures the new rules will save almost two billion barrels of oil over the next nine years and at the same time make it easier for us to breathe. Seems like common sense. But commentator Paul Kedrosky says good economic sense is something else again.
PAUL KEDROSKY: After years of auto companies saying that higher fuel-efficiency standards would bankrupt them, the Obama administration figured out a fix. Cleverly, it wiped out the auto industry first, and then raised fuel standards.
The right calls the standards an unnecessary intrusion into the economic lives of average Americans. If people want to buy massive, steel-clad gunboats and race down highways at top speed, getting 5 miles per gallon, all the while padding the pockets of America-hating fuel exporters, then that should be their right.
Environmental sorts on the left have complaints too. Some are already saying that 39 miles per gallon is not high enough. They point to Europe, where it is common now for many popular cars to get 50 miles per gallon and more.
But a more compelling criticism comes from recent economics research. To an economist, most things come down to price. A car that gets 39 miles per gallon is cheaper per mile to drive than a car that gets 18 miles per gallon. Make iPods cheaper, and more get sold. Make the cost per mile of driving cheaper, and people will drive more.
How much more? Research says it may be as much as 10-20 percent. People may not loiter on their way to work, but they will make more discretionary trips with their high-efficiency cars. And that has other effects too, like more highway congestion, and even more accidents and deaths.
Most sane people, even economists, want more efficient cars on the roads. But is the best way to do it making cars cheaper to drive? To an economist, the answer is obvious: we need to make it more expensive to drive, not cheaper. The best way to do that? Raise fuel prices. Higher gas taxes will cause people to drive less, cause emissions to tumble and motivate companies to build and sell more efficient cars. Granted, it might not be the same auto companies doing it, but I think we're all OK with that.
RYSSDAL: Paul Kedrosky is a senior fellow at the Kauffman Foundation. His blog is called "Infectious Greed."
I think Mr. Kedrosky's proposal of making it more expensive to drive is on the right track. I think it would need to go hand in hand with a massive improvement in public transportation infrastructure.
However, when he begins his piece with the rediculous claim that the Obama Administration wiped out the auto industry, he sounds suspiciously like another lying partisan hack.
To say that Obama wiped out the auto industry is completely false. Thye did that all on their own. I stopped even considering buying Ford, GM, and Chrysler products about 15 years ago after a few bad experiences. I have owned a Honda, Toyota, and Nissan and have been very happy. And now the Volvo, Saab, Mazda are owned by Ucar companies, I avoid those, too.
I truly like Paul Kedrosky's proposition. Why not make it a net zero proposition?
The average American drives 15,000 miles/year, and drives a 30mpg car (conservative for my calculation), that means that the average American spends about 500 gallons of gas per year.
Tax Gas at $1 extra (on top of existing taxes) per gallon which will give government $500/year/driver. But turn around and give taxpayers $500/year stimulus.
You have taken $500 in gas taxes, and returned $500 to a citizen. He/she can decide if to spend that money on the economy, a more efficient car, or simply driving a less efficient car.
I was so happy to hear the commentary by Paul Kedrosky. His perspective is a welcome change from the endless "what is today's gas price" non-news fed to us by all media outlets, including public radio. I stopped contributing to my local station (KPBS in San Diego) last year, because I was so sick of hearing the hourly updates on the price of gas. A high gas tax would not only promote the manufacture, purchase and use of fuel-efficient cars, it would cause Americans to use alternative means of transportation, discourage suburban sprawl (or at least raise the odds that far-flung suburbs would be served by decent public transport) and raise money to fund a wide variety of programs, including programs to help deal with the added cost to agriculture, mass transit, and other industries that may not be able to readily adapt to higher fuel costs. I drive a car with mpg that matches the proposed standard, and when gasoline was $4.50/gal in California, I rode my bicycle to work more often and was more careful about combining trips. The popular wisdom is that a high gas tax would never fly, politically, and that's probably true, and also very sad.
this only makes sense to the GM group that wanted us to buy suburban a few months ago! or to the oil stock holders. How many times does people have to tell you there is no money! people are loosing their homes. Now they want to put more burden on the public again so that GM exec get their fat pensions! When the economy starts again then we can slowly discuss new vehicles... now lets fix housing and credits. Get people working the rest will take care of itself.
Besides new really efficient vehicle can not be ready for 5 yrs. what we buy now is all prototypes and mechanical bills.
Much of what I hear discussed about raising the cost of fuel, making vehicles more efficient and promoting the use of mass transit seems solely focused on urban areas.
How would these proposed ideas affect the rural, agricultural areas of our country?
And by consequence the cost of the food we eat, the cotton and wool we use as cloth, the cost of the leather and many other agriculturally produced things we Americans use/consume each day. How much *more* would those free range chicken breasts and organic apples cost?
Making the farmer's tractor and combine lighter for better fuel efficiency would render the earth churning, bulk transporting equipment useless. Sure, the farmer could go back to using horses to plow with and deliver grain but then the food production would be reduced.
Mass Transit is not practical in the sparsely populated rural areas.
Does it really make sense to direct more confiscated fuel tax funds to further enhance the "infectious greed" of profligate government entities?
What about an incentive to make those buracracies more efficient?
And contrary to Mr. Kedrosky we're not all OK with it.
Such a plan might sound fine to the segway scooter st, or urban subway riders, but mant people driving long commutes or those in rural areas would be unfairly burdened and economically damaged.
Why not a two-prong approach: raising gas tax AND making fuel efficient cars? This seems to work in Europe, but then again there are other choices of transit there too. In full disclosure, I do not own a car, and I do rely on transit, bikes and a car-share program to get around.
Yes, a gas tax--based on vehicle weight. We've all seen a 110 pound woman leave the grocery store with a gallon of milk in one hand, a cell phone in the other, and climb into an Excursion. Those who choose to commute or shop in 'short buses' should bear bear the brunt of rising fuel prices, not those of us using sensible vehicles. How about twenty five cents per thousand pounds?
