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Economists say that taxing gasoline is the most effective way to reduce fuel consumption by non-commercial motor vehicles which are the second largest source of greenhouse gas emissions in the U.S. (Coal-fired electric power plants are the only larger source.) The fuel economy of cars in Europe is significantly better in Europe where gasoline taxes are higher and pump prices are more than double in the U.S. Gasoline taxes could be gradually increased to European levels over five or ten years. This would give car buyers and producers time to adjust to the higher prices. Economists also recognize that fuel taxes are regressive, bearing most heavily on lower income citizens. Moreover, higher gasoline taxes appear to be a non-starter, politically. Congress shows no enthusiasm for raising the gasoline tax, and Obama has ruled that approach out as well.
The CAFE (Corporate Average Fuel Economy)regulations resulted in improved fuel economy for a period in the 1970s until the truck/SUV loophole resulted in the production and sale of many more heavy, high horse-power vehicles for private use, culminating in the Hummer and similar gas hogs. This brought a halt to improvement in fuel economy of non-commercial vehicles in the U.S. Closing the truck loophole and imposing higher CAFE standards would be one way to improve fuel economy. But it may not be the best way.
Another approach would be to apply the laws of elementary physics by imposing a non-commercial vehicle weight tax. This tax could be tapered in over a 5 to 10 year period with the effect of roughly equalizing the cost per mile in the U.S. with that of Europe. It appears to me that a gross weight tax would not be regressive as would a fuel tax. And it would leave car makers free to produce whatever vehicles they wished--small, medium, large, gasoline, diesel, hybrid,CNG, etc., and it would leave car buyers free to buy whatever car or truck or SUV best fitted their preference and purse. However, the overall result would mean that more small, fuel efficient vehicles would be produced and CO2 emissions would begin to decline. The government would not be involved in the design, engineering or production of cars. Heavier cars would not be prohibited but they would be taxed sufficiently to compensate for the "external" costs of pollution and contribution to our country's dependence on foreign oil.[It should be noted that if a weight tax were adopted the regulation should include a weight credit for hybrid or battery powered vehicles which are fuel efficient although the batteries are quite heavy.]
Regulating or taxing engine displacement would be another possibility for achieving better fuel economy and reduced CO2 emissions. This would mean that SUVs and trucks would be more fuel efficient but would not accelerate like sports cars. Higher displacement cars would not have to be made illegal, but they would be required to pay for the cost of higher greenhouse gas emissions and lower fuel economy which perpetuates our country's dependence on foreign oil.
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