A Sensible Energy Policy: Pay the Right Price
ANOTHER deficient policy initiative is being negotiated in Congress. The energy bill recently sent to congressional conference provides huge subsidies to the oil industry at taxpayers' expense, while it lacks a crucial measure for long-term economic and environmental security: an increase in the federal gas tax. The bill will encourage Americans to continue to overconsume, overpollute, and be overdependent on petroleum.
Americans have not yet understood the impact on society of our gasoline overconsumption, even though many of us have grimaced at urban pollution and have lived through two oil price shocks and a war spurred by its oil supply implications. We continue to overconsume this commodity because we have never had to pay the actual costs of consuming it. In fact, when we consume oil-derived gasoline, we consume much more than just gasoline.
First, there are the environmental goods and services we consume when we drive that are not included in the price of gasoline. We take clean air from the environment, mix it with gasoline in a carburetor, transport ourselves by means of a contained explosion, and emit dirty air back into the environment through a tailpipe. We have consumed clean air, yet have not paid for it.
These environmental goods and services are in no way cheap. When gasoline is burned in our car engines, high levels of carbon dioxide (a major greenhouse gas), toxic pollutants (such as benzene and gasoline fumes), and unhealthy ozone-forming gases (smog) are emitted. This imposes debilitating costs on society, whether health costs that show up on hospital bills, or environmental degradation costs that may not be revealed for years. If unchecked, they will cripple our economy at the expense of our childr en's quality of life.
Another cost we have disregarded is the economic and political independence we "consume" when driving. Over 50 percent of the gasoline we use every day is derived from imported oil. Dependence on foreign petroleum siphons off an enormous amount of badly needed import dollars and puts our government in economic and political handcuffs.