The premise is flawed. We start with: Let's say your goal is to reduce gasoline consumption.
And then we start talking about fuel efficiency. IIRC, though, it's pretty well established in the economics literature that increasing fuel efficiency doesn't reduce gas consumption much, if at all. Increased fuel efficiency means lower effective gas prices, which people respond to by driving more.
The net effect is about the same level of fuel consumption, with more cars on the road (i.e. more traffic and more accidents).
If you want to reduce gas consumption, you have to increase the price. Good ways of doing this include taxing it, increasing demand for other stuff made from petroleum, or reducing supply.
The problem with increasing the price of gas is you hurt the poor most of all. Honestly, jacking up the price of gas isn't going to change my driving habits at all, but doubling the cost of gas (for example) will absolutely impact the budget of a lower income person who is commuting to work in an older car. They can't afford a newer car, they can't afford to move closer into the city, and there isn't public transportation available. They have no options other than to cut back on things like food and braces for their kids, etc... (sure some folks blow lots of money on cigs, big screen tvs, beer, etc... - but honestly the majority of people who are just scraping by, are doing their best).
Figure out how to make it affordable (while being safe) for people to live closer into major cities, and you'll have a real impact on gasoline usage.
Two things come to mind that might work:
1) Gas credits for the poor... but this might be hard to get right.
2) Cheap public transportation. This won't work everywhere, but I suspect it would work in big cities and their suburbs.
I think you're basically right, but I wonder about the details.
For example, my own driving is not money-limited-- gas could double in price and I would drive just as much, because I drive so little already. Whether I pay $200/year or $400/year for gas doesn't make a difference.
I suspect that the vast majority of miles driven are driven by people who would find cheaper alternatives, like buses or bicycles or email, if prices went up even 20%. But that's just speculation. Empirically, when gas costs doubled briefly last year, it seemed to me that traffic was still almost as bad.
So, I mostly agree with you, but I'm not 100% convinced.
Yes, but (I infer that) you're a well-paid, environmentally-conscious professional living in the center of a dense (and expensive) city. For everybody like you, there's a pizza delivery driver on the other side of the bell curve who covers 200 miles a night. If delivery-miles get cheaper, we have no reason to think the pizzeria wouldn't spend the savings on more drivers, so as to reduce the amount of time customers have to wait.
when gas costs doubled briefly last year...
We wouldn't expect to see much change so soon after the price shock. Filling up at $4.50/gallon is no fun, but in the short term it's something people are willing to put up with rather than buying a new Prius or moving into a new home with a shorter commute.
Comments
The premise is flawed. We start with: Let's say your goal is to reduce gasoline consumption.
And then we start talking about fuel efficiency. IIRC, though, it's pretty well established in the economics literature that increasing fuel efficiency doesn't reduce gas consumption much, if at all. Increased fuel efficiency means lower effective gas prices, which people respond to by driving more.
The net effect is about the same level of fuel consumption, with more cars on the road (i.e. more traffic and more accidents).
If you want to reduce gas consumption, you have to increase the price. Good ways of doing this include taxing it, increasing demand for other stuff made from petroleum, or reducing supply.
The problem with increasing the price of gas is you hurt the poor most of all. Honestly, jacking up the price of gas isn't going to change my driving habits at all, but doubling the cost of gas (for example) will absolutely impact the budget of a lower income person who is commuting to work in an older car. They can't afford a newer car, they can't afford to move closer into the city, and there isn't public transportation available. They have no options other than to cut back on things like food and braces for their kids, etc... (sure some folks blow lots of money on cigs, big screen tvs, beer, etc... - but honestly the majority of people who are just scraping by, are doing their best).
Figure out how to make it affordable (while being safe) for people to live closer into major cities, and you'll have a real impact on gasoline usage.
Two things come to mind that might work: 1) Gas credits for the poor... but this might be hard to get right. 2) Cheap public transportation. This won't work everywhere, but I suspect it would work in big cities and their suburbs.
I think you're basically right, but I wonder about the details.
For example, my own driving is not money-limited-- gas could double in price and I would drive just as much, because I drive so little already. Whether I pay $200/year or $400/year for gas doesn't make a difference.
I suspect that the vast majority of miles driven are driven by people who would find cheaper alternatives, like buses or bicycles or email, if prices went up even 20%. But that's just speculation. Empirically, when gas costs doubled briefly last year, it seemed to me that traffic was still almost as bad.
So, I mostly agree with you, but I'm not 100% convinced.
my own driving is not money-limited...
Yes, but (I infer that) you're a well-paid, environmentally-conscious professional living in the center of a dense (and expensive) city. For everybody like you, there's a pizza delivery driver on the other side of the bell curve who covers 200 miles a night. If delivery-miles get cheaper, we have no reason to think the pizzeria wouldn't spend the savings on more drivers, so as to reduce the amount of time customers have to wait.
when gas costs doubled briefly last year...
We wouldn't expect to see much change so soon after the price shock. Filling up at $4.50/gallon is no fun, but in the short term it's something people are willing to put up with rather than buying a new Prius or moving into a new home with a shorter commute.