[lbo-talk] A Case for a Higher Gasoline Tax

Gar Lipow the.typo.boy at gmail.com
Thu Jan 12 23:00:36 PST 2006


On 1/12/06, Wojtek Sokolowski <sokol at jhu.edu> wrote:
> All I was saying is that changing price structure will change behavior, because I know that from my own experience that they do. I take a train to DC because it cost me less, and drive to Harrisbutg of New York becaouse it is expensive. That has nothing to do with the effcient market.
>
> I think you labor under a mistaken assumption that there are no alternatives to cars in this country. <snip of a valid point about role of racism and U.S. apartheid in transportation>,

While a few people in this nation still have access to rail, for the vast majority the alternative to cars is buses - which double travel time, are uncomfortable and for the most part don't even save energy.

However I the feeling that the major points of my posts have been missed, so I'm going to do a summary:

Regulation, public works, and fees/subsidies on energy consuming capital goods (feebates) (both consumer and means of production) are a more effective way of saving energy than operational taxes. Compare the energy efficiency of EU nations that rely mainly on green taxes with those that have managed to salvage more of their regulatory structure and public works. Also look at the micro level, and you will find in general that much more investment in energy efficiency occurs in response to regulation and public investment than in response to price increases. Energy efficiency behaves suspiciously like a public good; energy demand is highly inelastic both in terms of short run behavior and long term capital investment. Not dead rigid; price increases have some effect on behavior - just less than regulation and public works. Given that both a regulatory/public works approach and a "green tax" approach have costs, it obviously makes sense to put the emphasis on what gives the best result for those costs.

Incidentally Yoshies "eminent domain" proposal is an excellent suggestion, not an answer by itself (and I'm sure not intended to be) but a really valuable point on a number of levels.



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