Quote:
Originally Posted by Can-Am
Would higher gasoline taxes be a better solution than mandating fuel economy standards?
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This is a double edged sword:
Making fuel more expensive will have side effects of increasing research on alternative fuels and decreasing driving.
However, it will also be a huge drag to the economy. The common conversation is that the current mess we're in is due to the housing bubble- however it's often forgotten that what popped that bubble was a spike in fuel prices. All the talking heads said that $4.00/gal gas was just the beginning (personally, I have some black helicopter theories here, but everything before the paranthesis is not theory-it's fact).
Well designed legislation with both carrots and sticks would incentivise private industry to create more fuel efficient solutions. Reworking cafe could actually be a growth industry for the US. The US is actually ahead of the curve on energy research but way behind the curve on implementation. Alot of this is due to poorly designed reactionary regulation.
Also, if we unilateraly increase fuel tax, we only impede what little competitive advantage we have left.
The fact of the matter is that oil is finite. There's debate on how finite, but there is no debate that it is finite. Oil prices will naturally trend up on an ever-sharpening curve as we get closer to that end point. As oil prices go up around the world, the whole world will get involved in alternatives (and Ethanol that uses cropland is not sustainable as a major fuel source either).
Therefore, I suggest minimal artificial means of increasing fuel costs. Strong incentives to increase fuel economy, mainly in terms of providing tax breaks for companies that make goals and investment in research to alternatives. Then let economics take care of itself as new technologies are produced that can provide sufficient fuel in large scales.