Carrots and Sticks to Reduce Car Emissions

We collectively need a drastic reduction of our CO2 emissions, especially from our cars, and as quickly as possible. This much is clear.

I have argued that an exclusive favouring of hybrid and electric vehicles makes no sense if other automotive technologies can also achieve emissions reduction (and I'm talking about real, lifecycle emissions, not just tailpipe emissions).

On the other hand, boosting funding for road maintenance by slapping a tax on hybrid and electric vehicles, as now proposed in several states, is a hare-brained scheme that gives precisely the wrong incentive. Assuming, that is, that we are serious about fighting climate change.

The most straightforward way to reduce cars' carbon emissions while simultaneously raising highway funds (and the most fair) is to impose a carbon tax, both on the buyer of gasoline, and the user of electricity. This way you will be taxed whether you drive a gasoline or electricity powered car. You will be taxed according to how much you drive - without the need for a tracking device. And you will be penalised for driving a gas/electricity guzzler, by bearing a higher per-mile cost, and rewarded for driving a sipper.

Currently, the Federal excise tax on gasoline is 18.4 cents per gallon; various state and local fuel taxes add on average another 30.4 cents per gallon, for a total of 48.8 cents per gallon. The Federal tax is unchanged since 1993, but the nation's fleet has become more fuel efficient, and 20 years' inflation has also taken its toll: no wonder the infrastructure budgets are suffering.

In comparison, in the Netherlands the 2013 excise tax on gasoline is $3.71 per gallon: €0.75 per liter, or 40% of today's €1.86 per liter price of regular unleaded.

Simply raising the gasoline tax would go a long way toward shoring up the means for road maintenance. Impose a similar tax on the carbon emissions of power plants (charged to the end user), and you would have a fair and transparent system in which it is easy for users to make an apples to apples comparison, for instance in the choice between a hybrid SUV and a smaller car with conventional engine. I repeat: No tracking device required.

Obviously, if you manage to power your EV off your solar array, wind mill or water wheel, you deserve to use the roads without being taxed.

But why stop there? Why be content with simply leveling the playing field?

 

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