Poor political calculus

28 May 2009 By Martin Hutchinson

US Energy Secretary Steven Chu s claim that a gas tax is not politically feasible seems wrong on two levels. First, Obama has sufficient support. Second, a gas tax would be a far better way to fight climate change than new CAFE standards and a cap and trade system.

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US energy secretary Steven Chu said on May 27 that it was not politically feasible for the United States to increase its gasoline tax.

President Obama introduced new Corporate Average Fuel Economy standards on May 19. Under them, the average fuel economy of each manufacturer's car and truck fleets will increase by 5% in each year from 2012 to 2016. From 2016, cars must average 39 miles per gallon, while light trucks (including sports utility vehicles) must average 30 mpg. The current standard is 27.5 mpg for cars and 24 mpg for light trucks.

A 2001 National Academy of Sciences panel found the CAFÉ restrictions introduced in stages in the 1970s and early 1980s "probably resulted in an additional 1,300 to 2,600 traffic fatalities in 1993.

A 2000 metaanalysis of 45 price elasticity estimates for gasoline by Daniel Graham and Steven Glaister of Imperial College, London, based on US and European data, found a mean of 0.71 and a standard deviation of 0.45.

The average US gasoline price was $2.44 on May 25, 2009.

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