It is finally starting to feel like spring around my parts. Warm weather means a lot of things; the beach, going topless in my Wrangler, and cringing every time I pull up to a gas pump. Gas has been fluctuating in recent weeks, but here in Connecticut it is only a few cents away from $3 a gallon. I wouldn’t be surprised to see it hit $3.50 in some places. Sounds expensive, but it wasn’t too long ago some of us were paying almost $4 a gallon or more. Remember that?
Now researchers at the Harvard Belfer Center for Science and International Studies report that, in order to meet the Obama Administration’s goals for cutting greenhouse gas emissions, gasoline would have to cost $7 a gallon. I’d have to sell my Jeep and buy a scooter at those prices. And I hate scooters.
I long ago came to realize that the government (no matter the administration) always seems overly ambitious in their goals. The EPA, under President Obama, wants to reduce greenhouse gases from the transportation sector by 14% of 2005 levels. They want to do this by 2020, a mere ten years from now. To do so, Harvard researchers say that gas prices need to reach $7 a gallon. That means to fill your average, 15 gallon tank would cost over $100. Keep in mind that many Europeans pay that much on a daily basis—part of the reason they have such a bigger selection of fuel efficient cars.
For their part, Americans have been driving less and less, and cars are getting more fuel efficient, but still that isn’t enough. According to the researchers, gas needs to cost so much that it would be prohibitively expensive to be practical for most people. Some of the models the researchers used assumed a CO2 tax of between $30 and $60 a ton that would be placed on every part of the economy. For a Prius driver, that would mean an extra $200 t0 $400 or so per year in taxes (according to fueleconomy.gov, an average 2010 Prius puts out 3.7 tons of CO2 annually by driving 15,000 miles).
Since the Hummer brand is dead, the Prius needs a new nemisis. I propose the Rolls Royce Phantom. Why not? For someone who drives, say, a Rolls Royce Phantom, which puts out 13.1 tons of CO2 annually and gets an average of 14 mpg, it would cost about an extra $780 to about $1,500 a year. Not that bad.
Higher gas prices would cost a lot more. A lot, lot more. If gas prices were at $7 a gallon, the estimated annual fuel cost of a Prius would go from $810 to over $2,100. The Phantom requires premium fuel, but for the sake of simplification (I suck at math) we’ll say it can still fill up at $7 a gallon. The annual fuel cost for the Phantom would go from $3,149 to over $7,500. Yikes! (although a Phantom owner would likely not even notice the difference in his bank account).
$7 a gallon gas would also likely cripple our slowly recovering economy and drive many small business owners into liquidation. But even Bob Lutz has said that a higher gas tax is needed. I myself have slowly come around to the idea, but with one catch; we need more options first. Once electric cars are more affordable and practical en masse, a higher gas tax could accelerate the transition from petrol-to-proton powered cars. It could also compel more people to use public transportation. But until we have other choices, a higher gas tax won’t do much more than line the pockets of the government and impoverish the masses.
One day this country will be ready to have a serious discussion about the gas tax. Just not tomorrow.
Sources: The New York Times | Harvard Belfer Center for Science and International Studies | Image: Guitar Guy via Wikipedia
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About Christopher DeMorro
$7 a gallon is about the price for gas in some parts of Europe. This is why smaller cars, and EVs make more business sense in Europe than in the US.
Higher gas taxes is indeed the solution if the administration is serious about improving air quality.
These higher taxes would be offset by lower health care costs. This would therefore make sense to link higher gas taxes with health care reform. Because one finances and enables the other.
$7 a gallon is about the price for gas in some parts of Europe. This is why smaller cars, and EVs make more business sense in Europe than in the US.
Higher gas taxes is indeed the solution if the administration is serious about improving air quality.
These higher taxes would be offset by lower health care costs. This would therefore make sense to link higher gas taxes with health care reform. Because one finances and enables the other.
Here’s a shocking idea: bring more fuel efficient vehicles to the United States. Small, clean turbo-diesels and EVs. We’ve already witnessed the mass exodus from the SUV driving suburban cult when gas was $4-5/gallon. Imagine the market for a diesel, EV, or strong hybrid that achieves 50+MPG when gas is $7/gallon.
Thinking in relative terms, $7/gallon gas would cost no more to the average consumer driving a larger vehicle that gets 25MPG (ok, even some smaller cars we have today struggle to get 25MPG city) who switches to a more efficient model that gets 50MPG- which is entirely attainable through existing technology! The Prius, BMW and VW turbo-diesels, etc.
Here’s a shocking idea: bring more fuel efficient vehicles to the United States. Small, clean turbo-diesels and EVs. We’ve already witnessed the mass exodus from the SUV driving suburban cult when gas was $4-5/gallon. Imagine the market for a diesel, EV, or strong hybrid that achieves 50+MPG when gas is $7/gallon.
Thinking in relative terms, $7/gallon gas would cost no more to the average consumer driving a larger vehicle that gets 25MPG (ok, even some smaller cars we have today struggle to get 25MPG city) who switches to a more efficient model that gets 50MPG- which is entirely attainable through existing technology! The Prius, BMW and VW turbo-diesels, etc.
Be sure to get a picture of yourself topless on that scooter…
Be sure to get a picture of yourself topless on that scooter…
Why doesn’t Obama just chain us to the oars and make us row faster?
Why doesn’t Obama just chain us to the oars and make us row faster?
I’ve said this before, but a gas tax is about the fairest tax there is. The problem is we’re over taxed already. I’d happily accept a large gas tax if they reduced the income tax and/or payroll taxes to the point of revenue neutrality.
Give the people more of their income (and increase the incentive to work in the process) and increase the price of gas (which would reduce the incentive to drive). What you’d see is people would be richer AND they’d be bicycling/walking more, riding mass transit, buying fuel efficient cars and clamoring for any new technology that enables them to buy less gas. Traffic congestion would be reduced (smaller cars and fewer of them), air pollution would be reduced and car accidents would be reduced.
We can’t have that, though. That would be “regressive” to democrats and hurt the poor disproportionately, all the while republicans would be up in arms about any tax increase (even if it accompanies an income tax decrease)…both sides would be bombarded by lobbyists from the oil companies to block it…but I can dream.
I’ve said this before, but a gas tax is about the fairest tax there is. The problem is we’re over taxed already. I’d happily accept a large gas tax if they reduced the income tax and/or payroll taxes to the point of revenue neutrality.
Give the people more of their income (and increase the incentive to work in the process) and increase the price of gas (which would reduce the incentive to drive). What you’d see is people would be richer AND they’d be bicycling/walking more, riding mass transit, buying fuel efficient cars and clamoring for any new technology that enables them to buy less gas. Traffic congestion would be reduced (smaller cars and fewer of them), air pollution would be reduced and car accidents would be reduced.
We can’t have that, though. That would be “regressive” to democrats and hurt the poor disproportionately, all the while republicans would be up in arms about any tax increase (even if it accompanies an income tax decrease)…both sides would be bombarded by lobbyists from the oil companies to block it…but I can dream.
I agree with Tim — just make the tax increase revenue neutral. Then the economic effects aren’t quite as harsh (there would still be negative effects, but they wouldn’t be as bad). I also agree that this needs to be phased in slowly so that there is time to adjust. But a gas tax / carbon tax does not have to increase the overall tax burden.
I agree with Tim — just make the tax increase revenue neutral. Then the economic effects aren’t quite as harsh (there would still be negative effects, but they wouldn’t be as bad). I also agree that this needs to be phased in slowly so that there is time to adjust. But a gas tax / carbon tax does not have to increase the overall tax burden.
I am a small business owner and a $7 per gallon cost would bankrupt me. I spend around $160 a week on gas for my cargo van for which there are no real alternatives as far as fuel efficient vehicles go.
Also remember if you have $7 per gallon everything inthe US that is shipped would be affected. Everything from food to mail to whatever we buy would drastically jump in price. Expect food and mail to more than double if this happens.
A $7 per gallon hike would cripple an already fragile economy. Why not just bail out rich companies and tax the hell out of the middle class. Oh wait…
I am a small business owner and a $7 per gallon cost would bankrupt me. I spend around $160 a week on gas for my cargo van for which there are no real alternatives as far as fuel efficient vehicles go.
Also remember if you have $7 per gallon everything inthe US that is shipped would be affected. Everything from food to mail to whatever we buy would drastically jump in price. Expect food and mail to more than double if this happens.
A $7 per gallon hike would cripple an already fragile economy. Why not just bail out rich companies and tax the hell out of the middle class. Oh wait…