Energy Efficiency: Regulation Vs. Price

Gar Lipow lipowg at sprintmail.com
Sun Mar 24 13:31:59 PST 2002


Doug said
>
> I've got absolutely nothing against environmental regulation. A
> higher gas tax whose proceeds were dedicated to public transit and
> energy R&D would make sense on several levels. So would tighter regs
> on smokestack emissions. I proposed a higher gas tax as a simple and
> painfully obvious step. There are others.
>
> Dan Lazare told me he saw research saying that the average suburban
> household in the U.S. takes 11 trips with the car. If gas didn't cost
> less than Evian, the number might be lower.
>

OK, but given that they both work, the question of which works better becomes important.

For example:

An increase in gasoline tax devoted to public transit and R&D would reduce gasoline consumption.

Tighening the CAFE standards, increasing mileage requirements, and plugging the SUV and light truck loopholse would reduce gasoline consumption.

Environmental groups have limited resources and political capital. Right now they are focusing on the CAFE standards for good reason. As the data

I posted indicates, while both are effective, regulattion is more effectivie. That is cutting the gasoline a trip requires will save more gas than reducing the number of trips. In addition tighter regulations are nearer to poltically possible. Nathan pointed out that both a majority of the public, and even a majority of the UAW suppport tighter regulation. I doubt the same is true for higher gasoline taxes. So the fact the regulation works better than price, in this particular case, is significant. Which brings me back my original statement which you questioned, that higher gas taxes are not the best way to reduce gasoline consumption.



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