Increasing gasoline taxes drove the now aggrieved French Yellow Vest movement into the streets to protest the Macron government responding to climate change at the expense of the already economically struggling. Instead, we need to shape climate solutions to improve the lives and livelihoods of citizens. The good news is there are market fixes that are not carbon taxes to quickly and painlessly affect the supply and demand for fossil fuels.
Poorly thought out and imposed plans have negative consequences. You can screw anything up, both markets and planning—markets that do not include the cost of externalities become ecosphere destroying machines; planning that shifts the costs on those less able to pay without plans for countervailing payments or credits.
Far better is to approach stopping and reversing climate change within the context of social and economic justice. When you add yet another tax on already sky high European gasoline prices, this is the straw that breaks the camel’s back. Market means that are not just another imposition placed by the rich upon the poor, but are part of comprehensive pursuit of ecological and social justice must be our guide for the conduct of global ecological economic growth.
Ecological and social justice is not, in spirit or in fact, reduced to a redistribution of resources from rich to poor. It is much more an expression of a common local and global pursuit of both freedom and community as the interdependent basis for an ecological civilization. Ecological civilization as an expression of freedom and community, of democratic equality, not simply of markets, capitalist or otherwise. The economic and market means we consider here are meant to be viewed through the lens of freedom and community, of social and ecological justice.
Markets are supposed to be all about supply and demand determining price. Ideally, we would seamlessly decrease both the supply and demand for fossil fuels with efficient renewables replacing fossil fuels at lower prices. Thus, carbon emissions decline and prices decline.
The Magic Formula
The magic formula in this case is to mandate the 15 year phase out of all gasoline powered cars and phase in electric vehicles and hydrogen powered vehicles with an equivalent fuel cost of around $1.00 a gallon savings a typical driver $1,500 a year in fuel costs.
A fifteen thousand mile a year driver of a 30 mile per gallon gas car using four dollar a gallon gasoline would spend $2,000 a year for 500 gallons of gas. The electric vehicle would cost $500. An annual savings of $1500 plus additional savings from no oil changes and savings on gas engine repairs since electric motors are more reliable and suffer much less wear and tear than internal combustion engines.
Government and regulatory policy is not just to set the rules and stand back. Government also needs to:
- Support infrastructure development for EVs and Hydrogen fuel cells cars;
- Green bank low interest long term loans for charging infrastructure. Charging is an extremely lucrative local business to replace gas stations once a significant percentage of cars are electric. Making sure charging infrastructure is available is key.
- Training and retraining workers for jobs in electric/hydrogen vehicle/solar/ wind/charging industry.
- Government auctions off local charging infrastructure franchises for street charging just as it auctions off electro-magnetic spectrum with 50% guaranteed for local and cooperative ownership.
- Implement building codes and zoning that require ability to plug in electric vehicles to homes and businesses to both provide energy allowed by battery charge levels, and serve as storage grid back up for the grid;
- Tax credits on EVs and hydrogen cars focused on lower cost vehicles
- Requirements phased quickly in that classes of commercial vehicles such as taxis, zip cars, rental cars, self-driving cars must be EVs or hydrogen, tax credit for ride hailing service driver like Uber and Lyft to use EVs or hydrogen.
- Cap and escalating annual reduction in production of fossil fuels
- Import duties on fossil fuels by producers who have not implemented gasoline replacement ;
- Support of renewably powered public and mass transit to reduce need for and use of private cars including buses, mass transit, national high speed rail network as major infrastructure priority.
What’s needed is to accelerate the phase out of gasoline power vehicles with meeting 2030 carbon reduction targets in mind and government support of electric and hydrogen powered vehicle charging and fueling infrastructure. Electric charging will be a highly profitable activity. Its installation could be speeded up by auctioning of limited but non-exclusive franchises by government similar to the way cell phone spectrum is marketed. What makes sense to me is that charging be considered a semi-utility with government contracting on a bid basis to install and then to operate an electric car charging network. The batteries of EVs would also prove to be a crucial part of electric system storage.
Increasing the price at the pump from a carbon tax on gasoline drove Yellow Vest protestors into the streets against one more burden imposed upon economically struggling workers. Carbon taxes without a tax and dividend scheme, which I believe is unnecessary, is not the best way to pursue carbon reductions and social and ecological justice.
The carbon tax is an economically signaling means beloved by many economists that by raising prices of carbon impacted goods you will help the development of non-carbon replacements. In general when there are replacements for carbon impacted goods and services that are cheaper non-polluting replacements cap and replace rules, like those for electric vehicles are far superior,
Supply and demand measures can help lead the way toward an ecological transformation that emphasizes reducing consumer costs and putting money in people’s pockets. After all, if saving civilization from ecological collapse makes you money, what’s the problem of departing from fossil fuels beyond the desire of the fossil fuel empire to sell their global reserve to the last drop or at least until the moment of collapse in an overheated world.
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Roy Morrison builds solar farms. His next book is Global Ecological Economic Growth: How to Stop and Reverse Climate Change forthcoming in 2019.