The Return of the Green Maroon (The Hidden Tierney)

In Fiddling While Fuel Burns (fully available to Times Select subscribers), it's evident that John Tierney has been reading some of Tom Friedman's Geo-Green columns (such as this one).

If your goal is to get Americans to burn less gasoline, then we've already hit on the best strategy. As long as the price of gas is high, people will drive less and buy cars with better gas mileage, just as they did during past price spikes. But there's no guarantee the price of gas won't soon plummet — unless it's propped up by a tax.

Alright, nothing new here. As I've noted before, I'm on board, along with Mr. Friedman, with some form of gas consumption taxes.

A gas tax is a far better way to encourage conservation and combat global warming than the method mentioned by Bush this week: mandating more fuel-efficient cars. A tax would work much more quickly than the mandate, since it would affect all cars now on the road, not just new ones. The tax would also cost Americans about 20 percent less to achieve the same fuel savings as the mandate would, according to the Congressional Budget Office.

OK, I can see the immediacy of using a gas tax to get people moving towards less consumption, especially since not everyone buys a new car every year (I certainly don't, though Mrs. F is wondering when we might be replacing out hard-working 1991 Honda Civic, Günter Grass, which currently averages about 32 miles per gallon). But here's where Tierney starts going all loopy:

The problem would be selling the tax to voters, but it could be phased in discreetly — say, a new dime of tax whenever the gas price declines 20 cents — with the promise that all the money would be given back. The new revenue could be evenly divvied up each year, either by mailing a check to every car owner or (my pet proposal) by putting it into a new private account for every worker now paying into Social Security.

A 50-cent gas tax would probably raise enough revenue to give each worker over $400 per year, much more impressive than the $100 checks that Republicans are now proposing to appease angry motorists this year. Instead of being a one-shot gimmick, these gifts would be an annual ritual — a chance for everyone, voters and their representatives, to congratulate themselves for another year of sensible conservation.

Excuse me, but WTF? What's the point of having a gas consumption tax if you're going to be giving it all back? Shouldn't that money be used to fund research and development toward our next steps in energy usage (that don't rely on petrol)? Or used as a carrot to reward good behavior by automakers for improving fuel efficiency? Or diverted to low-income drivers who are hit harder by this regressive tax? And mixing this with the conservative panacea of Social Security private accounts? C'mon! This would really make it much more regressive, as those who were able to afford more out-of-pocket expenses like gas would keep on spending with the knowledge that that money would be coming back to them. What disincentive would this gas tax be for them? And middle-class folks on the margins and low-income drivers would most likely curb their usage, thus minimizing the amount that would be placed into these accounts. (This brings up a point of shakiness in the column - is Tierney for giving back all the money, or just a $400 rebate check to "each worker"?)

Here's more from Tierney:

With Big Oil the new enemy, both parties want to take away some of its tax breaks, an idea that's not bad. But both parties are still determined to help out their favorite industries. And just as the 1970's energy planners lavished money on fuels of the future that turned out to be duds, Congress still seems to have a knack for backing losers.

Right now, for instance, the best alternative to gasoline is probably the cheap ethanol produced in Brazil and other foreign countries. But instead of giving drivers a chance to switch to this fuel, Congress is imposing a stiff tariff on it to protect the Midwestern farmers who produce higher-priced ethanol.

The best way to promote alternative fuels is to give them all a chance by imposing a tax on gasoline. That would give investors the incentive to find cheaper alternatives, and the market would sort out the winner — natural gas, ethanol, methanol, soy diesel, whatever works.

Now that President Bush doesn't have to worry about winning the Iowa caucuses, he could afford to give drivers a break by subjecting corn farmers to competition from Brazil. He could reduce fuel consumption and global warming with a gas tax — and maybe in the bargain leave a legacy of Social Security private accounts. But if he sticks with the 1970's tactics, he'll be remembered about as fondly as Jimmy Carter.

Again, I agree with Tierney's assertion that the best way to get the public moving toward alternative fuels is via a gas tax. But we can't just sit on the promise of the invisible hand of market forces alone to improve the fuel efficiency of our vehicle fleet. And more than a gas tax, I'm liking the idea of "feebates," as noted by the Sightline Institute, which is a very interesting carrot-and-stick market/governmental approach to modifying energy usage behavior:

The basic idea is elegant in its simplicity: vehicles that are more efficient than average come to the showroom carrying a rebate for their buyers. Those rebates are proportional to the efficiency of the vehicle, so superefficient vehicles come with whopping big rebates.

As average efficiency increases, the feebates reset themselves around the new average, manufacturers raise their wares’ efficiency to compete, and consumers set their sights still higher. Efficiency snowballs.