Gas is too cheap

One Cent's Worth
By ZACK ANCHORS  |  July 11, 2014

Last month I used this space to report on one of the most significant steps ever taken by the US government to prevent climate change: New rules proposed in June by the Environmental Protection Agency that would require power plants across the nation to reduce carbon emissions 30 percent by 2020. Since electricity production accounts for nearly a third of carbon emissions produced in the US, that’s a big deal.

On the other hand, the rules don’t do anything to address the second largest source of carbon emissions: transportation. As long as getting around in a car and moving goods by truck remain cheap and easy, a huge share of carbon emissions will come from tailpipes.
People love to complain about the high costs of driving, but gas in the US remains a steal compared to other countries. The low cost of gas is especially obvious when it’s compared to the price of other commodities like bottled water, or basic staples like milk. Our government spends a fortune pursuing policies that allow cheap gas and easy driving.

The best way to push people to drive less would be to make driving more expensive. That’s why lots of environmentalists and economists have been pushing for years for a serious spike in the federal gas tax, which hasn’t been raised since 1993. Currently, the federal gas tax is 18.4 cents per gallon.

It’s hard to think of a more straightforward, common sense solution to any problem than a hike to the gas tax. Doing so would ensure that people who benefit most from roads and bridges are the same people who pay for them, since dollars collected from the gas tax flow into the federal Highway Trust Fund. A higher gas tax would also help reduce congestion, incentivize more fuel-efficient cars, make public transit more attractive, and place a cost on the pollution that inevitably occurs anytime you burn gas.

Unfortunately, it’s pretty much taken for granted in Washington that raising the gas tax, despite being sensible policy, is politically poisonous. Americans like consuming cheap gas—while complaining about expensive gas—and few politicians have the guts to mess with that self-destructive privilege.

But there’s another, more urgent reason to raise the gas tax that might make it easier for lawmakers to go out on a limb. The Highway Trust Fund is running out of money. Officials predict the fund will become insolvent by the end of July unless Congress scrapes together some cash. Abound 80 percent of the cost of Maine’s road and bridge projects rely on federal funding, so if that money dries up the impact would be felt close to home.

This dire need to find money to pay for roads and bridges has inspired a bipartisan proposal from US Senators Bob Corker (R-Tenn.) and Chris Murphy (D-Conn.) to raise the federal gas tax by 6 cents per gallon each year for the next two years. After that two-year period, the gas tax would be linked with the rate of inflation.

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