We hold this truth to be self-evident: When the global economy recovers, fossil-fuel prices are going to skyrocket again.
Why? Three billion new capitalists consuming the same, largely finite resource stream.
If there’s an intelligent argument why oil will stay at $40 into the hereafter when production is relatively steady and consumption is rising, we’ll be happy to evaluate it. But we haven’t heard it yet.
So what can we do about future skyrocketing prices? No mystery: Conserve fossil fuels and develop renewable energy technologies.
Aside from a handful of rich people, though, no one’s ever going to use renewable energy technology until it costs less. And as long as the global economy and fossil fuel prices collapse every time fossil fuel prices spike, it’s going to be a long time before renewable technologies will be consistently cheaper.
So what can we do about that? Make sure fossil fuel prices stay consistently expensive.
With, among other things, a gas tax.
Not a flat-rate gas tax. A floating-rate one…that would adjust to the price of oil (and help minimize price spikes).
And not now, because it would be another hammer blow to the economy. In a few years, so people and industries have enough time to adjust.
For example, the US could peg gas prices at a minimum of $5 a gallon after 2014 by phasing in a tax starting in 2012. Whatever gas would cost on the open market (benchmarked to the price of oil), the tax would make up the difference between that and $5. If the market price for gas went over $5, the tax would disappear.
Yes, free-market folks will scream. Yes, the oil industry will scream. Yes, folks who love Hummers will scream. But we’ll be better off in the end. Folks who want to drive Hummers will still be able to. Our deficit will be slightly less horrific (new tax stream). And everyone will be incented to buy technologies that are better for everyone, helping to launch dozens of new industries in the process.
Tom Friedman has produced a good first draft of the speech Obama should give to sell this plan…
“My fellow Americans, I want to speak to you about a new economic law. You’ve heard of Moore’s Law in information technology. I’d like to speak to you about the ‘Law of More’ in energy technology. Americans, Indians, Chinese, Africans, we all want more — more comfort in our homes, more mobility in our lives, more technologies with which to innovate. But there is only one way all 6.3 billion of us can have more and not make this an unlivable planet, and that is by living our lives and running our businesses in more sustainable ways and properly accounting for it. Read the whole thing >
See Also: Time For A Gas Tax
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