The House GOP loves to repeat falsehoods about climate and clean energy action (see "MIT Professor tells GOP to stop ‘misrepresenting' his work and inflating the cost to families of cap-and-trade by a factor of 10" and then again three weeks later, MIT Professor says GOP "misrepresentation" of his April 2007 study to project costs for Waxman-Markey is "inappropriate," "silly" and "just wrong").

If you are listening to the House floor debate over the "rule" that will set the terms of the debate for Waxman-Markey, then you've heard pretty much every Republican repeat the claim that the Congressional Budget Office found that W-M would add $.77 a gallon to the price of gasoline in the next decade.

That charge is false.  It comes from the American Petroleum Institute, (see here) which decided to ignore the actual CBO analysis and offer its own instead, claiming it is what CBO found.  The API is a strong opponent of the bill and has been pushing disinformation on global warming for more than a decade.

As a study by 5 national laboratories noted in1998, "$50 per tonne of carbon [$14 a tonne of carbon dioxide] corresponds to 12.5 cents per gallon of gasoline."

To cause a $.77 increase in gasoline prices, the climate bill would have to result in greenhouse gas allowance prices of some $85 a ton of CO2. Now you can go to Table 3 of the CBO analysis yourself, and you'll see that CBO estimates the allowance price will hit $26 a ton in 2019 - and that is in actual (not inflation-adjusted) dollars.  In 2008 dollars, that would be closer to $21 to $22.  So in fact the CBO estimates that gasoline prices in 2019 would be about 20 cents a gallon higher than today (in constant dollars). And that's a lot lower than the price will rise if we don't take strong action to jumpstart the transition to a cleaner, more efficient energy system.

In fact, CBO found, "Waxman-Markey cuts U.S. GHGs sharply but costs only a postage stamp a day - without counting the efficiency savings."

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The American Clean Energy and Security (ACES) Act allocates funding to produce the next generation of clean, fuel-efficient vehicles in the United States, and when combined with clean vehicle performance standards adopted by the Obama administration, the American on-road fleet will become about 25% more fuel efficient over the next decade.

As a result, by 2020, Americans will drive more efficient vehicles and have lower household transportation costs. Even in the face of rising gasoline prices, cleaner vehicles will save money by sipping instead of guzzling gasoline.

For detailed methodology and explanations, and a printable map, visit my original post.

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The Wall Street Journal reports that an increasing number of energy analysts think that U.S. gasoline sales will never surpass their 2007 record:

Among those who say U.S. consumption of gasoline has peaked are executives at the world's biggest publicly traded oil company, Exxon Mobil Corp., as well as many private analysts and government energy forecasters...

Many industry observers have become convinced the drop in consumption won't reverse even when economic growth resumes. In December, the EIA said gasoline consumption by U.S. drivers had peaked, in part because of growing consumer interest in fuel efficiency.

Now, I've got something approaching zero confidence in the ability of energy analysts to predict the future. (Or, perhaps more to the point, different analysts say different things, and I've got no confidence in my ability to pick and choose which ones are making sense.)

Still, it's interesting to read that Exxon is beginning to bet against a resurgence in highway fuel consumption, by easing out of the retail gasoline business. They've got actual skin in the game, and if they're betting against a short-term rebound in gas consumption, then at a minimum the other analysts aren't crazy. And, of course, recent trends add some heft to the belief that consumption is falling: despite my skepticism a few months back, it looks like U.S. vehicle travel is continuing its freefall.

This post originally appeared at Sightline's Daily Score blog.

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Whether they are called "revenue enhancements" or "user charges," fear of the political consequences of taxes restricts debate on energy and environmental policy options in Washington. In a March 7 post on "green jobs," in which I argued that it is not always best to try to address two challenges with a single policy instrument, I also noted that in some cases such dual-purpose policy instruments can be a good idea, and I gave gasoline taxes as an example.

Although a serious recession is clearly not the time to expect political receptivity to such a proposal, the time will come -- we all hope very soon -- when the economy turns around, employment rises, and a sustained period of economic growth ensues. When that happens, serious consideration should be given to increases in the federal tax on gasoline.

A gas tax increase -- coupled with an offsetting reduction in other taxes, such as the Social Security tax on wages -- could make most American households better off, while reducing oil imports, local pollution, urban congestion, road accidents, and global climate change. This revenue-neutral tax reform would exemplify the market-based approaches to environmental protection and resource management I examined in previous posts.

Such a change need not constitute a new tax, but a reform of existing ones. It is well known ­-- both from economic theory and numerous empirical studies ­-- that taxes tend to reduce the extent to which people undertake the taxed activity. In the United States, most tax revenues are raised by levies on labor and investment; the resulting reduction in these fundamentally desirable activities is viewed as an unfortunate but unavoidable side-effect of the need to raise revenue for government operations. Would it not make more sense to raise the revenue we need by taxing undesirable activities, instead of desirable ones?

Combustion of gasoline in motor vehicles produces local air pollution as well as carbon dioxide that contributes to global climate change, increases imports of oil, and exacerbates urban highway congestion. Can anyone really claim that -- given a choice between discouraging work and discouraging gasoline consumption -- it is better to discourage work?

According to the Department of Energy, a 50-cent gas tax increase could eventually reduce gasoline consumption by 10 to 15 percent, reduce oil imports by perhaps 500 thousand barrels per day, and generate about $40 billion per year in revenue.

Furthermore, this approach would be far more effective than ongoing proposals to increase the Corporate Average Fuel Economy (CAFE) standards, which affect only new vehicles and lead to serious safety problems by encouraging auto makers to produce lighter vehicles. Also, remember that a major effect of CAFE standards has been to accelerate the shift from cars to SUVs and light trucks (so that overall fuel efficiency of new vehicles sold is no better than it was a decade ago, despite the great strides that have taken place in fuel efficiency technologies). As my Harvard colleague Martin Feldstein pointed out in The Wall Street Journal in 2006, the conventional approach "does nothing to encourage individuals to drive less, to use their cars more efficiently, or to shift sooner to new and more fuel efficient [and cleaner] vehicles." A more enlightened approach ­-- a market-based approach -- would reward consumers who economize on gasoline use. And that is what a revenue-neutral gas tax is all about.

The revenue from the gas tax could be transferred to the Social Security Trust Fund and credited to current workers. If $40 billion per year from new gas tax revenues were transferred to Social Security, the payroll tax -- the employee contribution to Social Security -- could be cut by perhaps a third: a worker with annual wages of $30,000 would take home an additional $750 per year! The extra income would more than offset the cost of the gas tax, unless the worker drove over 35,000 miles per year in a car getting 25 miles or less per gallon. Rebating the gas tax in this way addresses the greatest concern about higher gas taxes -- that they can hit hardest those workers who drive to their jobs. Further, a tax of this magnitude could be phased in gradually, perhaps no more than 10 cents per year over 5 years, allowing individuals and firms to adjust their consuming and producing behavior.

Proposals for gasoline tax increases in recent sessions of Congress would have dedicated the revenue to public spending (for transportation and other programs). A key difference is that the proposal I have outlined here is for a revenue-neutral change in which the gas tax revenue would be returned to Americans through reduced payroll taxes. To adopt some of the language I developed in my previous posts, such a change can be both efficient and equitable, and -- for those reasons -- perhaps even politically feasible.

Of course, such a scheme is not a panacea for U.S. energy and environmental problems. But it would make a significant contribution if enacted. On the other hand, political fear of the T-word in Washington may mean that it is never discussed seriously in public, let alone adopted. Most fear of taxes is due to politicians' anxieties about asking their constituents to pay more. But an increase in the Federal gas tax, rebated through reduced payroll taxes would not cost most Americans any more and would have significant long-term benefits for the country. Still, fear of the T-word looms large; maybe it should be called an "All-American Ecologically Sound, Fully Recyclable, Anti-Terror, Energy-Independence Assessment."

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Hi Umbra,

When it comes to holiday presents, does it really save energy and gas to order stuff online?

Rick G.
Manchester, N.H.

Dearest Rick,

Holiday gift time, everyone! Many of you have already begun shopping, I know, and I also know that my birthday, coming in early December as it does, adds to the gifting pressure for everyone.

For better or worse, e-commerce has taken purchase.

I wrote last year about the hung jury on online shopping, and then Oak Ridge National Laboratory came out with a bit more information for the 2007 holiday season. To review my belabored, but still accurate, hedging: Driving alone to shop is worse than having a few items shipped. But having something flown overnight is stupid. And "e-commerce" is new enough that all the eco pros and cons are still under evaluation.

ORNL, an arm of the Department of Energy, clarified the basics a bit further. They studied shopping patterns and related emissions, and their numbers were very clear. Thirty percent of holiday shopping was done online last year, and the result was equivalent to 63 percent of American workers staying home for a day. Nearly half a million metric tons of CO2 were avoided. In other words, we can feel good about the gas we save via online shopping. But!

While greenhouse gases are the most important consideration, they are not the only holiday pitfall. Throughout this holiday season, let's all try to practice common ecological sense. Keep it together, people (especially Christmas-celebrating people). Don't lose your cool in the upcoming frenzy.

How we shop is only one piece of the holiday puzzle. We need to plan ahead. Walk to shop if you can, or carpool. Don't get caught driving around and around at packed shopping malls so you can look for something, anything to buy your loved one. When shopping online, don't get into an Overnight Shipping situation, and remember to use conservation measures with your computer. (Turn it off when not using it, use the sleep function instead of a screen saver, and put all your computery accessories on a power strip, flipping that off at the end of the day.) While I'm preaching on holiday madness: Avoid crazy toxic vinyl decorations or anything disposable. Reduce! Reuse! Recycle!

In general, we need to be sensible gifters, steering clear of buying unnecessary, useless stuff. "Give experiences, not things," as they say in my county. Or give wanted things. Or make things for people, if they're open to it. Look at Grist's list of stuff-free gift ideas and our gift guides (start here) -- they are full of great ideas ranging from actual objects to ethereal concepts.

Best of luck for staying sane and low-impact during the upcoming preparations for SolstiQuaHaMas.

Tinselly,
Umbra

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