jtr1962 said:
you need to give people incentives to buy such cars. We should start with a gas tax of a few dollars per gallon for no other reason than to get drivers to pay the true cost of the damage that burning fossil fuels causes(cancer, asthma, acid rain, possibly global warming).
Mate, if you thinj global climate change is just a possibility", then you have a serious problem. Slip over here for a few days and I'll walk you round and I'll
show you what it's doing. There is no "possibly" about it. It's a solid sute-thing fact.
But that's not the point I wanted to make. I wanted to say that if we want to charge drivers the
true cost of the fossil fuel they are burning, then a few cents a gallon is nowhere near enough.
No matter: your key point remains valid. Taxing fuel is far and away the best way to achieve results. It's a win-win proposition:
* For the environment, it reduces pollution and fossil fuel usage.
* For the economy, (US, Australian, UK, in fact everywhere) it improves the balance of payments. Less money flowing out of the country to Saudi Arabia (or anywhere else) = less nation debt = healthier economy
* For Detroit: gradually increasing fuel prices = more sales as people buy more efficent cars
* For motorists: cleaner air, less congestion (see below for the reasons), and no massive cost increase - quite possibly a decrease, as once the taxes start to bite and more efficient cars become available, anyone who buys one winds up paying twice as much per gallon but only using half as much.
* For city planners: smaller cars take up less road space and need smaller parking bays. Smaller cars do less damage to road surfaces and this saves money too. With fuel more expensive, there is a good incentive to build/improve mass transit.
* For the government: taxing petroleum provides revenue, masses of revenue, ad it's revenue that unlike almost all other revenue, is not hurting anyone - indeed, it's doing a power of good. From a government's point of view, it's damn near "free money". This revenue can be used to do public works, or to reduce taxes. Either way, the more of it there is, the better it is for everyone.
The key thing is that the tax increase needs to be
small and it needs to be
steady. A single massive increase only causes a huge economic disruption and achieves little. You need to provide an immediate kick-start - say, a 5% or 10% tax on petroluem (plus whatever taxes already exist, of course), but no more than this - and you announce that there is going to be another 2.5% increase on 1st January next year. And every year you add another 2.5%. So you announce now that although it's only going up by a little bit today, in the longer term it's going to keep going up, little by little every year. So if you are thinking about buying a new car, or you are thinking about drawing up the plans for your 2009 model, you can see right away that a more efficient one is the way to go.
Given that policy, you don't need to do
anything else: the market does it all for you. And the market wil do it more efficiently than any government ever can. We don't have to worry about picking the best technologies to save fuel - Detroit will bust a gut doing that for us, and the millions of car buyers across the world will reward the companies in Detroit that do it the best by buying their products. That's how markets work. That's what markets
are.
Last point: how is it that "distorting the market" by adding an artificial tax can do all this good? Are distorted markets the very thing that is
wrong with out economies? My word they are! And the biggest single distortion in the world market today is the gross undervaluation of non-renewable resources. So we ain't
introducing a distortion, we are
correcting a distortion.
