General Motors has promised to switch from being a manufacturer of gas-burning pickups and SUVs today to producing electric vehicles only by 2035. For climate change, this could be a step in the right direction, given that light-duty vehicles accounted for about 17% of U.S. carbon emissions in 2018.
To be sure, fulfilling what GM itself carefully designated an “aspiration” presents technological and economic challenges. GM itself has wasted precious time and resources on recent mistakes — its attempt to partner with Nikola, a troubled startup in hydrogen-fueled trucks, and its now-abandoned backing of Trump administration attempts to end California’s tougher fuel-economy standards. As a GM official told the Detroit Free Press, “This is going to take the effort of a lot of people and a lot of governments to get there.”
That allusion to “governments” sounds like a pitch for electric-vehicle subsidies — vehicle purchase tax credits, investments in charging infrastructure and the like. But it can and should be interpreted to include other incentives for motorists to drive the already-existing 270 million petroleum-burning SUVs, pickup and cars less — and switch to gas-sipping alternatives sooner.
The most powerful such incentive would be higher taxation of gasoline. It’s hard to think of a single measure that would do more, more quickly, to create a market for the electric cars GM and others are promising. A 2018 study by Energy Innovation, a San Francisco firm, suggested that a 25-cent-per-gallon increase in federal gas taxes would result in about 1.2 million additional electric vehicles on the road by 2050.
The United States cannot logically pursue both a cheap-gas policy and a pro-electric policy, yet that is roughly the status quo. The federal gas tax has been 18 cents a gallon since 1993, which means it has shrunk 44% in real terms since then. It would take a 14-cent increase to offset that erosion; and there is room for more without unduly burdening consumers. Even a 50-cent increase would only restore the total price of an average gallon of regular gas to where it was in 2009, adjusted for inflation, according to the federal Energy Information Administration.
Independent reporting for Pine Bluff & Jefferson County since 1879.
Each 5-cent increase in the gasoline tax reduces U.S. gasoline consumption by 1.3% in the short-run, according to a 2012 study for the Harvard Kennedy School of Government. Thus, a 50-cent increase could cut consumption by 13%, with all the carbon-reduction benefits that provides. Making such a tax permanent, and adjusting it for inflation annually, would create a permanent market signal.
Many states have adopted higher gas taxes to pay for highways, rebutting the conventional wisdom that such policies are politically toxic. Like all excise taxes, gas taxes are regressive and should come with measures to protect the poor; but the higher new-car prices and nontransparent income transfers that result from current fuel-economy regulations and electric-vehicle tax credits are regressive, too, and not transparent.
Too often, climate policy proposals imply Americans can enjoy a free lunch on the way to sustainability. Gas taxes are more honest.