Options for lowering domestic fuel consumption:

• Increasing Fuel Taxes

  This is known as ‘allocation by price’. It is highly regressive as it allows the wealthiest Americans to consume unlimited quantities of fuel by paying more for that fuel than the least wealthy are willing to pay. The result is a combination of the wealthy driving any size SUV they desire, while millions of less wealthy Americans may not be able to afford to drive at all.

  While the higher fuel prices make public transportation more attractive, it would take a very large tax increase for a meaningful shift from private to public transportation. And the result would again be regressive, with less wealthy Americans forced to use public transportation while the more wealthy Americans drive their vehicles of choice on less crowded roads.
  

 

• Carbon credit proposals

  While this also does work to cut the total burn of fossil fuels it also does this via ‘allocation by price’ and is also highly regressive. Nor does it target the gasoline and diesel fuels we import from foreign monopolists. By issuing transferable carbon credits that periodically decline in magnitude prices of carbon based fuels rise until demand fall to the level of the restricted supply. Again, this means the wealthy can drive any vehicle they wish on less crowded roads abandoned by those who can no longer afford to drive.
  

 

• Increasing Fuel Efficiency Standards

  New vehicles sold in the US can be required to get more miles per gallon than currently required. This is much less regressive than a fuel tax, but takes longer to have the desired effect of reduced fuel consumption. Also, it currently applies to a company’s average mileage for all the new cars it sells. The result is the production of fewer vehicles that go fewer miles per gallon than the required minimum, and more vehicles that go more miles per gallon than the minimum. Raising the mpg requirement would shift production further toward more fuel efficient vehicles.
  

 

• Reducing the National Speed Limit to 30 mph for Private Ground Transportation

  This directly cuts gasoline consumption as vehicles are potentially far more fuel efficient at 30 mph than 60+ mph. The lower speed limit also reduces the amount of long distance driving due to individual time constraints.

  Additionally, demand for public transportation is increased due to the same time savings. Since time is presumably more economically valuable to the wealthy, they lose the most by the lower speed limit and would have the most to gain by improved public transportation. Therefore, the wealthy would use their influence to improve public transportation which would go a long way to getting the job done and in short order.

  The other advantage of the lower speed limit is the reduced need for safety features, as the possibility of injury decreases geometrically with speed. This means lighter, simpler, less expensive cars would be available and traffic deaths substantially reduced.

  Smaller cars also require and take up less space, reducing traffic congestion and parking demands.
  The reduction in consumption could be over 5 million barrels per day of crude oil products in the US alone, which would:

  • Provide the net supply shock capable of reducing crude and refined product prices
  • Improve our real terms of trade and greatly enhance our quality of life
  • Increase national security by reducing dependence on foreign oil

 

• Slow environmental degradation

  It is a political choice: ration by price as we are currently doing or use other methods, some of which are already in place, such as fuel economy standards.

  This proposal simply adds the price of ‘time’ to burning gasoline for all private transportation, thereby making fuel efficient, cleaner, and less resource intensive alternative transportation more attractive.
  

 

• Incentives to Trade in Less Fuel Efficient Vehicles for More Fuel Efficient Vehicles

  With this proposal the government offers monetary incentives for individuals to trade in less fuel efficient vehicles for more fuel efficient vehicles. The incentive could be, for example, $250 for each mile per gallon of improvement. This would drive the sale and production of more fuel efficient vehicles and more rapidly increase the share of miles driven by more fuel efficient vehicles. However, it does not remove the less fuel efficient vehicles from the roadways as they are allowed to be resold.