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December 13, 2005

Gas Fees: The Good, The Bad, and The Curious

I'm not sure, exactly, whether this news is promising or disappointing: the San Jose Mercury News reported last week that environmental advisers to Governor Schwarzenegger are calling for a new fee on gasoline that would help pay for incentives to reduce climate-warming emissions.

The good news here is that they're considering fees on gasoline in the first place. 

The bad news is that the proposed fees are tiny -- just 2.5 cents per gallon, which isn't enough to affect consumption more than a nominal amount.

The good news is that the fees will go to a good cause: there are a lot of inexpensive ways to reduce emissions, so the fees, as small as they are, could do a lot of good -- especially considering that California uses about 15 billion gallons of gasoline per year, so a 2.5 cent per gallon fee would raise $375 million per year. 

The bad news is that opponents are already up in arms, blasting the idea as an unnecessary new tax on gas.

Of course, there's also a curiosity here that's worth noting.  The proposed gasoline fees are similar to the "public goods charge" already levied on electricity bills.  But it seems as though the outrage about new "taxes" is largely reserved for gasoline; fees on electricity get a pass.  Which suggests that gasoline holds a special place in the American psyche -- we pay close attention to anything that can make gas prices go up, but let similar price increases in other parts of the economy slide by unnoticed. 

One possible explanation for this is that we're a car oriented culture, and that we've come to prize cheap, unlimited mobility.  I think that's only partially true.  To me, it seems that we pay so much attention to the cost of gas because it's the only commodity whose price is regularly and consistently advertised on busy streets. Day to day, most people get much more information about gas prices -- which stations have cheap gas, what the recent price trends have been -- than about anything else they buy.  The way that gas is advertised has made us super-attentive to its price. 

Which makes me wonder what the world would be like if the harmful side effects of gasoline (money shipped out of the local economy; greenhouse gas emissions; cost of foreign entanglements; etc.) were advertised as broadly as its price.

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The simplest explanation is that we are a "credit" and not a "tax" society. We'd rather get stuff, and so we hand it out, regardless of fiscal and/or environmental responsibility.

Funny (or sad). They gave me a tax credit for my Prius, and some nice stickers so I can take the car pool lane, but they don't want a 1 percent (more or less) tax on gas.

Our societal respones to gas crisis and/or global warmig are uneven to say the least.

Posted by: odograph | Dec 13, 2005 2:17:46 PM

Imagine the reaction if the tax/fee was comparable to other countries. For example, Australia's tax/fee is equivalent to $1 per gallon.

But even those levels haven't put a huge dent in driving habits although the there is a bias towards smaller cars.

2.5 cents won't effect consumtion by even a nominal amount.

Posted by: Mike | Dec 22, 2005 4:22:06 PM

I honestly think that even if the harmful effects of gasoline were advertised along with their prices, it wouldn't change people's attitudes. The fact is people depend on gas and their cars to go from Point A to Point B. Now living in a town like Seattle with a great metro system its hard to see why anyone would depend on driving anywhere! But where I grew up, a small town in Southern CA, it's implausible to think of any other way of getting around besides driving. The absence of a bus or metro system or even a carpool system leaves the community no other choice. Advertising the harmful effects of gas wouldn't change that regretably.

Posted by: Melissa | Jan 25, 2006 10:55:22 AM