On last night's program, commentator Alice Rivlin suggested the U.S. use a more market-oriented approach to rein in traffic congestion and vehicle pollution. Here's what Rivlin, senior fellow at the Brookings Institution and former vice chair of the Federal Reserve, had to say:
"If you believe in a market system, you know we don't price carbon emissions correctly. If we had the political courage to raise the price of spewing carbon into the air, we would slash pollution. But another price we don't get right is the price of using congested highways. Highways are financed with gas taxes, and their use is normally free. But every additional vehicle on a congested highway imposes a cost on other cars using the same road -- each one slows the others down. Using a commuter route at rush hour should cost more than driving on an empty country road. If we collected money from those who impose costs on others, we could reduce congestion and pollution and improve mass transit dramatically.We need bolder action than replicating downtown Londo'ns camera-enforced congestion fees in Manhattan or the Chicago Loop, although that would help. Every car and truck should have a tiny transmitter and its use on congested roads should generate a bill, like a cell phone bill, with charges for the minutes it imposes costs on others by worsening traffic congestion. If we use the proceeds to provide fast, reliable public transportation, everyone will get home sooner with more breathable air and less global warming. I'm Alice Rivlin."
So, what do you think of Rivlin's proposal? Would you pay more to use commuter routes if you knew your money benefitted the environment and reduced traffic congestion?
Comments
A resounding NO, I would not pay more for the following reasons:
Given the price of gas the highways are benefitting from the gas taxes quite a bit more (double since 2-3 years ago). We the drivers are paying these taxes and absolutely no additional costs should be assessed. Incentives should be paid to anyone carpooling on the busy commuter routes leading to major cities. The more people in the pool car, the better the incentive.
I don't generally agree with Alice Rivlin, but I must concede one point. Gas prices and gas taxes aren't too high, they are too low. Ms. Rivlin goes way too far in true liberal fashion, and quickly morphs a market solution into a complex and expensive set of government programs (mass transit plus the infrastructure needed for her congested road tax).
Keep it simple and let the market do the rest. If you want to get carbon pollution down, get OPEC under control, change consumer behavior, and minimize the impact of high oil prices on the U.S. economy, then a high tax on oil (and natural gas) would do the trick. Don't spend the new tax dollars. Use the new oil tax revenue to lower other taxes such as marginal tax rates or increase personal exemptions on the federal tax return. What a boon to the U.S. economy! Take money currently going to OPEC members and use it for a tax refund for U.S. households. People who buy SUV's and otherwise waste gas spend their tax refund on the new gas tax. Those who conserve get to pay less tax. Ironically, we may end up paying less for gasoline if the reduced demand breaks OPEC's death grip on us. Raise the price of oil via taxes, and let supply exceed demand for a change.
Ms. Rivlin also left off one other impact or mispricing. People who buy gas guzzlers or otherwise waste energy drive up the cost for the rest of us. Their excess demand makes us all pay more.
Impose Ms. Rivlin's carbon or oil tax, but don't waste the money on more government mass transit no one will ride. Give it back to the consumer, help the U.S. economy, and let the market give us conservation and lower prices.