I've suggested before that making gas expensive is the best way to reduce consumption on a national level, beyond the efficacy of energy policy mandates, and with little to no effort on the part of legislators. It required no tax credits, no legislation and no minimum-sales requirements, but a dramatically growing segment of the population has decided that 8mpg vehicles just don't cut it with $4 a gallon gas looming on the horizon.
But it gets better than that. Besides buying smaller cars, some people are choosing to simply drive less in their large vehicles. And the beauty of prices is that it lets every individual choose how they are going to respond. Some people will just cut back in other areas of life and drive as they always have. Some will choose mass transit. Some will drive less or slower. Some will choose to carpool. And some will buy more efficient vehicles. But people get to choose the solution that best works for them. This minimizes the burden on the people as a whole without the government needing to try to micromanage anything.
"How the downsizing of America’s vehicle fleet will affect fuel consumption is still largely unknown. When gas prices rise, as they are now, many drivers simply drive less to save money. But there are some indications that the trend toward smaller vehicles will reduce the nation’s fuel use. In California, motorists bought 4 percent less gasoline in January than they did the year before, a drop of more than 58 million gallons, according to the Oil Price Information Service."
It's a burden on the people to have to pay more for gas. But vehicle emissions are a HUGE part of total CO2 emissions, and if you want to reduce that, it will be costly. The best way to mitigate that burden is to give people the most flexibility in responding to it.
Friday, May 02, 2008
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5 comments:
How would you respond to people that say the higher gas prices hurt the poor and working class more?
I'd say it's entirely true. Transportation is a major part of American life in general, and those who live from paycheck to paycheck (or worse) have much less flexibility.
With that being said, that's true of anything that needs buying. It's true of housing prices, electricity bills, food prices, diaper prices, deodorant prices, clothing prices, etc. Gas prices are no different.
Prices and a budget set constraints on how much we can consume - both individually and corporately. High gas prices have an aggregate was of limiting demand - even "Green" California, which ideally is already making a huge attempt to cut emissions and oil consumption, responded to higher prices by consuming significantly less gasoline as prices rose. They also indicate that a resource is scare, and provide incentive pocket by pocket and gas tank by gas tank to conserve.
I do not believe that it is necessary for every adult to have a car, though it is a big convinience. We use gas because we regard it as a better option, but I remember Glenn Biasi biking to meetings across town, Terri biking herself and Judah to church, and my roommate who's just about as old as me and has never owned a car, or even gotten a license. His mom is single and nearly blind, but also survives on her own without having a car. It might take lifestyle changes, like living closer to work, walking to the store, and getting the bicycle out of storage, but I think people can learn to be pretty flexible.
The individual-automobile ratio is something we take for granted, but there are alternatives. And we won't ever see a dramatic shift in individual habits until the people are forced to choose an alternative. They can be forced through higher prices into choosing the best substitute for them individually, or the government can tell everyone what alternative they will choose. I find the former to be more efficient and less burdensome.
If changing gas consumption is something the government desires, we can't imagine that the change will simply come by making "the rich" behave differently while the lives of everyone else are unaffected. A ban on SUV's would hit the Hummer-driving celebrity a lot more lightly than the cash-strapped family of 6 that needs a car that big to get around in together.
Hey Dave, I've tagged you with a meme. See my blog.
Good post. Too many people out there don't understand that gas prices are driven by supply and demand. Even though they understand that everything else is priced that way. I don't get it.
I lived in Raleigh (one of the most notoriously driving-heavy cities in the country) without a car for a month and found that it's a hell of an inconvenience, but doable, especially if you have a bike, live on a bus line, and have friends with whom you can carpool.
As a note, if we're worried about the impact of gas prices on the working poor we should just up the EITC. Which we probably should do anyway.
Thanks!
The only downside to such a plan (heavy tax all gas consumption, then reimburse in some fashion the poor that are hit by it) is that the poor people being hammered by this price need to be part of the solution.
You don't make a huge impact on gas consumption if you only hit people making $100,000 or more (hypothetical) with a given plan, because everyone below that high line continues as before.
That said, I think that's the best way (in a general sense) to use the money from a gasoline-use-reduction-tax, and I know it's touted in general by such consetvatively minded folks as Milton Friedman as the best sort of poverty-assistance plan. It gets efficiently around the "targeted" programs that politicians love, but whose effectiveness is more limited.
And, since the EIC isn't directly tied to gas, the poor still get to choose whether to use that money to get bus fare, a bike, or to just pay for more expensive gas. That flexibility is critical in my eyes.
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