Carbon taxes

Ernest Thoughts

By Ernest ⋅ July 12, 2009 ⋅

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Tags: carbon tax, fuel

Dear friends:

Inspired by a forthcoming talk on carbon taxes:

I have read a number of articles and columns dealing with gasoline taxes. As Charles Krauthammer notes, under capitalism, demand and supply are balanced by the market price. If, as seems plausible, the petroleum supply is not going to increase significantly, then we Americans may as well keep the money here, rather than let the high prices just benefit a few select countries, most of which are not really our friends. That is one good argument for increasing transportation fuel taxes.

There is another good argument: the American transportation infrastructure of roads, railways pipelines and waterways, is not being adequately maintained. The major problem is money. While this has been reported in the media, it was never been given great importance. Both Elaine and I serve on the Regional Citizens Committee, which advises the Delaware Valley Regional Planning Commission, so we are knowledgeable about such matters.

Motor fuel taxes were supposed to build and maintain highways. This limitation on the use of fuel taxes was pushed by the automobile clubs many decades ago, and is enshrined in many state constitutions. Decreased consumption of motor fuel obviously leads to lower revenue. Meanwhile, inflation has raised the cost of needed repairs. Also, not to our surprise, the price of asphalt, a petroleum product has tripled.

The only fair way to handle both the problem of deferred maintenance and the shrinking availability of petroleum fuels is to tax all transportation fuels, for all modes, proportional to their energy content. Higher taxes will fund the repair of bridges, the construction of more public transit, the repair of leaking pipelines, and the restoration of the American railroad system. By taxing all transportation fuels equally, as measured by energy content, there will be a great economic incentive to shift freight onto the rails, to reduce the number of flights, and to electrify significant portions of the transportation systems. Every American will win when the most energy efficient transportation modes are used most.

Peace in a sustainable world,
Ernest B. Cohen & Elaine H. Cohen
ernest.cohen@ieee.org

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