Double Dip Recession? What there ever a recovery?

[The Kernel]

Of course, the irony here is that it's the stupidity of the humans allegedly in charge of these vehicles that accounts for most of the danger.

It doesn't matter, short of robotic cars panning out (Google is trying, but I figure we are still decades off before the things become standard) people will continue to drive like idiots. The only way to protect yourself from the onslaught of idiocy is to surround yourself with two tons of steel. Newton is just a bitch that way.

[Broomstick]

Fair enough regarding the other issues Broomstick, however I would like to address the last one regarding mugging. Certainly people get mugged currently in stores/parking lots and at intersections, my concern is that you're exposing people for a greater amount of time and over a larger area than previously. You can lessen the likelyhood of mugging in stores and parking lots with hired security, something that is becoming more common, and other methods like good lighting and security cameras. There isn't much that can be done at intersections to actually prevent a crime save having an officer present which is highly impractical, but most intersections have fairly short traffic lights (certainly no longer than a couple of minutes). My concern is that a person is in potential danger for a longer period of time walking than they otherwise would be..

That is certainly a concern in high crime areas, but as someone who lived without a car for many years in an urban area, using buses, trains, my bike, and my feet, while mugging is a risk I don't think (except in high crime areas) that this is a really a significant factor. It's a concern, but not something that is a show-stopper. Mugging in low crime areas happens, but it's not as common as people fear.

[Simon_Jester]

You've got to be fucking shitting me. Rail works great in certain situations, but it's not going to be cost effective in urban sprawl situations. Rail only works for commuting when you have densely packed areas where it is easy to put a honeycomb of lines and stops in convenient locations, it helps fuck all in the suburbs.

Rail plus bus works pretty well if it's managed intelligently. It doesn't necessarily carry everyone, but it gives you an option that isn't a car.

The only data point you have that suggests gas prices and miles driven are even related is the 2000-2010 period where miles driven leveled off and dropped slightly but it was less than 10% despite increases in fuel prices of 2x. I'd hardly call that a massive achievement for the taxation argument.

What happened to average miles per gallon of the American automobile fleet during the same period? If miles driven drops 10% and average gallons burned per mile drops 20%, you've gained by about 30%, which is a lot more significant and promising.

It doesn't really matter how many miles are driven. Fuel consumption matters, from a social perspective; miles driven in personal vehicles doesn't.

Oh, another question, was that "miles driven" or passenger-miles? Because passenger-miles won't include carpooling and I don't know how they incorporate mass transit.

[Surlethe]

You're repeating what I said but using different words: the squeezed, strapped families will maneuver themselves to become less squeezed and strapped, making society more efficient. And I'm not seeing how soaking the people like you who are rich enough to not change their habits as much doesn't count as a progressive system of taxation.

Ok, let's explore this a little bit then so I understand what you are arguing for. How much would you propose increasing fuel taxes and over what period of time?

If we are going to look at how realistic your social engineering is put some real numbers to it.

I'm really arguing for some tax T>0, with the actual number determined by factors I can identify but can't (by myself) quantify. Just for the sake of the argument let's say a gas tax the same as Germany's, $6/gal.

And I'm claiming that a Pigovian gas (or more generally, carbon) tax gives almost all of the benefits of energy efficiency regulation and subsidization while increasing government revenue and decreasing the cost to the government (hence to society) of specifying and enforcing regulations and subsidies.

Except that it penalizes economic activity instead of rewarding economic activity that is environmentally friendly. So if you end up suppressing economic activity then your net tax revenues fall and you end up with lower net tax receipts. Subsidies may cost more money upfront but they have the same effect as punitive taxation without any of the economic fallout.

All that matters when you want to change behavior is changing relative incentives. A gas tax creates incentives all through the economy for people to move toward behavior that is environmentally friendly; merely by changing one signal, you get a society-wide movement toward environmentally responsible, fuel-efficient behavior. A subsidy also changes relative incentives, but only for the industry or technology at which it's directed, and only by drawing resources away from other parts of the economy. In effect, a gas tax kills many birds with one stone, while using subsidies requires many stones and still doesn't get all the birds.

Moreover, a gas tax is preferable because it forces people to actually bear the costs of their decisions. It penalizes economic activity that should be penalized, because that economic activity is creating external costs. And, of course, it's economic activity that will need to change anyway as oil production declines.

And they spend time and money trying to find loopholes in the regulations, people who want SUVs will try to find loopholes in the regulations, the government has to spend time and money finding the people who are looking for loopholes in the regulation and close the regulation, sometimes the businesses will just say "fuck it" and pay the fines (in which case the legislation hasn't even worked), and so on. And that's not even counting that the automakers (their shareholders) are losing out on the profits. (I know, fuck the rich, but that still counts as a cost to the automakers, their employees, the pensioners who are invested in them, the people who count on the automakers for employment, and so on.)

This is just meandering rhetoric with zero in the way of specifics. It's also a scare tactic that the auto industry loves to use to convince legislators that CAFE standards are a waste of time.

Look what has happened in the last few years as CAFE standards have been raised. We have seen a general push towards more efficient engine technologies (turbocharging, direct-injection) and a move away from larger displacement engines. Weight savings has also become a serious consideration for car makers.

The net effect of this is that cars haven't changed much, but the automakers have been forced into implementing more efficiency in their designs. Granted that there is a lot of low hanging fruit that is being picked right now, but that is EXACTLY THE POINT. They could have built cars this efficient years ago but didn't because no one was forcing them to.

I'd say the current trend in automotive design pretty much puts a bullet into your argument that regulation is ineffective in resolving this issue.

Except that this trend is also accompanied by rising gas prices and more fuel-conscious consumers. What's to say this wouldn't have happened, and without accompanying lobbying, etc., if gas prices were jacked up with a gas tax?

Your chart actually supports my contention that driving habits respond to price changes: miles driven has fallen for more than half a decade. Recall also the second law of demand: if gas prices stay high for an extended period of time -- are expected to stay high -- demand elasticity rises. Meanwhile, to support that the effect of CAFE standards are partially mitigated by people driving further, I need to only remark that no real-world supply of a good is totally inelastic on the scale of decades, which is the relevant timescale for CAFE standards.

You obviously didn't read that chart very carefully. During the energy crisis of the late 70s, gas prices doubled overnight and yet the amount of miles being driven by Americans kept growing at a steady rate.

I think you're reading it wrong. Gas prices doubled and the number of miles driven by Americans hit a wall.

The only data point you have that suggests gas prices and miles driven are even related is the 2000-2010 period where miles driven leveled off and dropped slightly but it was less than 10% despite increases in fuel prices of 2x. I'd hardly call that a massive achievement for the taxation argument.

Clearly if you want to deter Americans from driving, these statistics show you'd have to REALLY tax the shit out of fuel and artificially raise the price at least another 200%-300%. Is that what you are suggesting?

For the sake of argument, yes. See above. But even a smaller increase in price will lead to a greater effect over time; like I keep saying, demand is more elastic the longer the time-frame. If gas prices shoot up to $4/gal for a summer, then fall back to $3/gal, you shrug and take a hit to your budget. If gas prices shoot up to $5/gal and stay there for a year, you start looking for a new apartment closer to work.

Of course there are; they need fixing too. I'm not denying that there are secondary effects, I'm claiming that those ripples are also society moving toward a more fuel-efficient, environmentally-friendly configuration.

Those elements of the economy are the way they are because they're not bearing the full consequences of their decisions with regard to carbon emissions, and they're going to change anyway as oil production falls off over the next few decades. Spreading out that change over time -- and requiring that people actually bear the costs of their decisions -- can only make society as a whole better off.

(Edit: forgot to respond to a point.)

I agree, but I disagree that during a period of economic recession that punitive taxation on activities that provide positive economic growth are a good idea. If you really want to do social engineering like this, subsidies and regulation have proven just as effective without any of the economic damage that punitive taxation does. In fact they can even spur greater economic development through investment in new technologies.

Several points. First, recessions are transient. If some policy is a good idea during a boom, it's also a good idea during a recession. Second, this recalculation is something that's going to happen anyway, and the sooner we get started, the better, never mind if it's during a recession or a boom. Third, a fuel tax is the more efficient solution from the government's point of view; instead of paying the money/time cost of identifying potential new technologies, identifying regulatory benchmarks, paying to subsidize and enforce, and potentially getting it wrong (like corn-based ethanol), the government collects revenue it can use to help grease the reconfiguration and it gets people to change their behaviors.

[Starglider]

Except that this trend is also accompanied by rising gas prices and more fuel-conscious consumers. What's to say this wouldn't have happened, and without accompanying lobbying, etc., if gas prices were jacked up with a gas tax?

Aside from the hypothetical being a weak argument in the first place, there is an obvious difference in the impact of CAFE across the model range. With rising fuel prices the pressure is felt almost entirely by the low end econobox models, there is much less incentive to increase fuel economy in SUVs and 'executive' vehicles and almost none to increase it in luxury vehicles, as for these buyers the cost of fuel is not as relevant. As a fleet average the impact of CAFE is felt across the range, weighted only by volume sold.

[Surlethe]

Ooh, that's a good point.

[The Kernel]

I'm really arguing for some tax T>0, with the actual number determined by factors I can identify but can't (by myself) quantify. Just for the sake of the argument let's say a gas tax the same as Germany's, $6/gal.

A gas tax of $6 per gallon would raise prices at the pump to roughly $9 a gallon. How quickly do you propose implementing this?

All that matters when you want to change behavior is changing relative incentives. A gas tax creates incentives all through the economy for people to move toward behavior that is environmentally friendly; merely by changing one signal, you get a society-wide movement toward environmentally responsible, fuel-efficient behavior. A subsidy also changes relative incentives, but only for the industry or technology at which it's directed, and only by drawing resources away from other parts of the economy. In effect, a gas tax kills many birds with one stone, while using subsidies requires many stones and still doesn't get all the birds.

Moreover, a gas tax is preferable because it forces people to actually bear the costs of their decisions. It penalizes economic activity that should be penalized, because that economic activity is creating external costs. And, of course, it's economic activity that will need to change anyway as oil production declines.

Do you see me arguing that the gas tax should be abolished? No. It probably even deserves to be a little higher than it is now, but $9 a gallon gas would be destructive.

Instead the proper solution to the problem is a gradual increase in gas taxes (not the punitive shit you are recommending) along with steady increases in CAFE standards AND subsidies for low or carbon neutral energy projects and transportation. Gee, kind of like EXACTLY what we are doing right now (aside from the increase in fuel taxes to pay for the subsidies, but you can't have everything I guess).

Just as an aside, if you really want to reduce carbon emissions in an intelligent way through taxation, why not do just tax the hell out of meat products? Vegetarian diets will reduce your carbon footprint at least 50% and you'll get a lot more bang for your buck with such a scheme without harming consumption (people still need to eat regardless of whether it is meat or vegetables).

Except that this trend is also accompanied by rising gas prices and more fuel-conscious consumers. What's to say this wouldn't have happened, and without accompanying lobbying, etc., if gas prices were jacked up with a gas tax?

Starglider already covered this very well. We already saw the effect of this during the energy crisis of the 1970s. The econo-boxes started getting more efficient but the vehicles that targeted the wealthy didn't change.

However now thanks to CAFE standards, even BMW is moving their entire line down to smaller and smaller engines at a rapid pace. And they are doing it without sacrifices to horsepower.

I think you're reading it wrong. Gas prices doubled and the number of miles driven by Americans hit a wall.

Yeah, they stopped growing but of course they were going to stop growing. There is a limit to how much a person will drive in a year once cars reach a saturation point.

For the sake of argument, yes. See above. But even a smaller increase in price will lead to a greater effect over time; like I keep saying, demand is more elastic the longer the time-frame. If gas prices shoot up to $4/gal for a summer, then fall back to $3/gal, you shrug and take a hit to your budget. If gas prices shoot up to $5/gal and stay there for a year, you start looking for a new apartment closer to work.

You seem so sure that you need to do some kind of massive social engineering to move people closer together to fix the problem. Not only would this be hugely disruptive to the economy, it would take generations to accomplish.

If your goal is simply to reduce the usage of gasoline and carbon emissions, there are easier ways to solve the problem. Improved fuel efficiency vehicles, electric cars and plug-in hybrids all dramatically reduce fuel consumption. This can be further backed up by an increase in carbon neutral power generation.

As an example, if I add solar panels to my roof (with state and federal subsidies) and I get a Chevy Volt or a Nissan Leaf (also subsidized), I've just cut my carbon emissions and oil consumption by a huge amount.

Several points. First, recessions are transient. If some policy is a good idea during a boom, it's also a good idea during a recession.

Tell that to the Japanese.

Second, this recalculation is something that's going to happen anyway, and the sooner we get started, the better, never mind if it's during a recession or a boom.

There are softer ways to accomplish the same goal. I've listed some of them out above and we are already doing most of them.

Third, a fuel tax is the more efficient solution from the government's point of view; instead of paying the money/time cost of identifying potential new technologies, identifying regulatory benchmarks, paying to subsidize and enforce, and potentially getting it wrong (like corn-based ethanol), the government collects revenue it can use to help grease the reconfiguration and it gets people to change their behaviors.

The government is not a business and I wish people would stop thinking of it as one. It's supposed to correct things that the market forces don't know how to deal with.

As an example, most private business will NOT do long-term R&D spending. It's much too risky and the investment community doesn't like it. Therefore the government has to subsidize these things despite the fact that it doesn't have any instant revenue potential. I could go blue in the face listing the technologies we wouldn't have today if it wasn't for government investment that they didn't make a dime off of.

[Broomstick]

Remember that the purpose of the US-style gas taxes would be two-fold under this plan:

1) Maintain the roads - that is actually their intended purpose now.
2) Provide an incentive to reduce fuel consumption, either through better efficiency, reduced mileage, or both.

In regards to #1, since there is a direct relationship between how many miles a vehicle drives and how much fuel consumed, those who drive more will pay more road tax than those who drive the same type of vehicle less. Those who drive heavier vehicles, which impose more wear on the roads, will also pay more. Those who purchase luxury vehicles, which tend to be larger/heavier, will also pay more. Thus, those who use the roads more and/or impose more wear on the roads will pay more towards their upkeep.

In regards to #2, it is true, some people won't give a damn about efficiency or reduction in miles driven. However, historical data indicates that a sizable percentage will, enough to have an effect on overall fuel consumption, emissions, and more efficient technology.

So even if not everyone participates in #2, enough will to have a detectable effect in the direction desired. And those who don't care about #2 and have the money to ignore the increased costs will still be contributing to the upkeep and maintenance of the roads.

So I see it as all good. Well, up to the point a significant number of people can no longer afford to buy fuel at all, but I'm assuming we all understand the concept of diminishing returns and the benefits of people being able to transport themselves vs. being stuck in one place. So a somewhat increased gas tax could arguably be a social good, but you have to be careful not to overdo it. The idea of gradually increasing them over enough time that it is practical for people to make adjustments probably has the most merit.

[The Kernel]

And Surlethe? I've actually done a fair bit of research on reducing personal carbon footprint and found out what the best things a person can do are with the greatest bang for your buck. I didn't just do this as an experiment, I've already started implementing this in my household.

Here they are, ordered by priority:

• Go vegetarian or vegan. This will reduce your carbon footprint by anywhere from 50%-80% with one lifestyle change. I've already done this for exactly this reason.
• Improve your home by fixing insulation, replacing old appliances with new energy efficient ones and throwing out all your incandescent bulbs and moving to LEDs (or CFLs if you are on a tight budget). I've just finished doing this.
• Add solar to your roof, assuming you live in an area that this makes sense (California is perfect for this). You can cut your electricity bill to ZERO (you pull power from the grid at night but you are paid for your overproduction during the day which feeds back onto the grid) and the system will pay for itself in around 10 years at current rates.
• Get a more fuel efficient car, ideally electric or plug-in hybrid, especially if you are producing your own power via solar.

Add all this up and you are looking at solving the carbon footprint problem. And these are all things that people can do themselves today.

[Broomstick]

And if that's too extreme for you...

Go vegetarian or vegan. This will reduce your carbon footprint by anywhere from 50%-80% with one lifestyle change. I've already done this for exactly this reason.

If you can't or won't go vegetarian at least reduce the amount of meat you eat - you don't need it every day. Buy local so your food isn't burning up fuel being transported. Start a garden if you can and use compost instead of petroleum-based fertilizer for the ultimate localvore food.

Improve your home by fixing insulation, replacing old appliances with new energy efficient ones and throwing out all your incandescent bulbs and moving to LEDs (or CFLs if you are on a tight budget). I've just finished doing this.

If, like me, you rent and you're limited in what you can do in this area you can still change your lightbulbs to more efficient ones, you can turn things off/unplug them when you're not using them, purchase more efficient appliances, and "trip-chain" - instead of making many trips for errands plan out several in sequence so you reduce the amount of fuel you burn on the road.

Add solar to your roof, assuming you live in an area that this makes sense (California is perfect for this). You can cut your electricity bill to ZERO (you pull power from the grid at night but you are paid for your overproduction during the day which feeds back onto the grid) and the system will pay for itself in around 10 years at current rates.

I suspect in the near future we'll see more small-scale solar applications, portable ones and not just the ones bolted to a roof. Even in an area like Chicago you can still derieve some benefit from solar power, though not nearly as much as California, and it takes more time to get a return on your investment.

Even if you can't make drastic reductions, a lot of people making small changes still adds up to a real effect.

[Surlethe]

A gas tax of $6 per gallon would raise prices at the pump to roughly $9 a gallon. How quickly do you propose implementing this?

Over five or six or maybe ten years sounds reasonable to me.

Do you see me arguing that the gas tax should be abolished? No. It probably even deserves to be a little higher than it is now, but $9 a gallon gas would be destructive.

Oh, so that is how Europe was destroyed.

Instead the proper solution to the problem is a gradual increase in gas taxes (not the punitive shit you are recommending) along with steady increases in CAFE standards AND subsidies for low or carbon neutral energy projects and transportation. Gee, kind of like EXACTLY what we are doing right now (aside from the increase in fuel taxes to pay for the subsidies, but you can't have everything I guess).

As I've argued, subsidies (and to a lesser extent CAFE) are doing things that could be almost entirely accomplished by a higher gas tax.

Just as an aside, if you really want to reduce carbon emissions in an intelligent way through taxation, why not do just tax the hell out of meat products? Vegetarian diets will reduce your carbon footprint at least 50% and you'll get a lot more bang for your buck with such a scheme without harming consumption (people still need to eat regardless of whether it is meat or vegetables).

If we actually were to man up and tax CO2 emissions (not just gasoline), this would happen.

Yeah, they stopped growing but of course they were going to stop growing. There is a limit to how much a person will drive in a year once cars reach a saturation point.

So that limit is just coincidentally reached each time gas prices skyrocket?

You seem so sure that you need to do some kind of massive social engineering to move people closer together to fix the problem. Not only would this be hugely disruptive to the economy, it would take generations to accomplish.

I'm not sure why you're describing a gas tax as "massive social engineering." I'm also not sure what you mean by "hugely disruptive to the economy" - the economy is always in massive flux. And again, as I've been saying, this is the kind of change that is going to happen anyway as oil production falls off; a gas tax merely spreads it out in time.

If your goal is simply to reduce the usage of gasoline and carbon emissions, there are easier ways to solve the problem. Improved fuel efficiency vehicles, electric cars and plug-in hybrids all dramatically reduce fuel consumption. This can be further backed up by an increase in carbon neutral power generation.

And again, with perhaps the exception of automobiles targeted toward the wealthy (SUVs, etc), all of this you can get with a gas and carbon tax.

As an example, if I add solar panels to my roof (with state and federal subsidies) and I get a Chevy Volt or a Nissan Leaf (also subsidized), I've just cut my carbon emissions and oil consumption by a huge amount.

Sure. And if you're paying enough for electricity and gasoline (because of a carbon tax) you will get those things anyway.

The government is not a business and I wish people would stop thinking of it as one. It's supposed to correct things that the market forces don't know how to deal with.

I'm not sure why you think that I'm saying government is a business. I'm saying that gasoline (and carbon more generally) is a great example of a market failure, and that the most efficient way to correct that failure is a gasoline (carbon) tax. Just because the government is not a business does not mean that we shouldn't try to get the government to do its job efficiently.

As an example, most private business will NOT do long-term R&D spending. It's much too risky and the investment community doesn't like it. Therefore the government has to subsidize these things despite the fact that it doesn't have any instant revenue potential. I could go blue in the face listing the technologies we wouldn't have today if it wasn't for government investment that they didn't make a dime off of.

I don't disagree with you. But a broad-based subsidization of R&D is not the same thing as targeted, technology-specific subsidies.

[The Kernel]

Oh, so that is how Europe was destroyed.

Europe has a much higher population density than the United States and they have fuel efficiency already baked into their fleet. You can't change things like this over night.

As I've argued, subsidies (and to a lesser extent CAFE) are doing things that could be almost entirely accomplished by a higher gas tax.

Yes, and they do it with much less disruption. Thanks for making my point.

The only reason we are in the situation we are in now is because we dragged our asses on hiking the CAFE standards during the Bush years.

If we actually were to man up and tax CO2 emissions (not just gasoline), this would happen.

Let me get this straight...you are arguing that regulation is impossible to properly maintain because of loopholes and lax regulators and you think a CO2 emissions tax would somehow be a slam dunk?

Besides, it's a broadsword when you need a scalpel. A massive food tax is a MUCH better idea for the following reasons:

1) It will not impact consumption in any way, shape or form. People still need to eat and forcibly switching people to a vegetarian diet will not change this.

2) It is trivially easy to enforce. You only need to tax the end product, not every step in the supply chain.

So that limit is just coincidentally reached each time gas prices skyrocket?

If you think fuel price volatility hasn't negatively impacted economic growth then you are kidding yourself.

I'm not sure why you're describing a gas tax as "massive social engineering." I'm also not sure what you mean by "hugely disruptive to the economy" - the economy is always in massive flux. And again, as I've been saying, this is the kind of change that is going to happen anyway as oil production falls off; a gas tax merely spreads it out in time.

Reducing dependence on oil is everyones goal. The question is what is going to be the most effective with the least disruption.

And again, with perhaps the exception of automobiles targeted toward the wealthy (SUVs, etc), all of this you can get with a gas and carbon tax.

You can also get the same result if you outlawed automobiles. The preferable choice is still clear.

I'd also like to bring some reality into this--US politics see taxes as being somewhere between baby killing and child molestation. Regulations like CAFE, although still hated by certain elements, are much easier to justify.

Sure. And if you're paying enough for electricity and gasoline (because of a carbon tax) you will get those things anyway.

And I don't think that a carbon tax is a bad idea in principle, but we were talking about punitive fuel taxes not an overall carbon tax bill.

I'm not sure why you think that I'm saying government is a business. I'm saying that gasoline (and carbon more generally) is a great example of a market failure, and that the most efficient way to correct that failure is a gasoline (carbon) tax. Just because the government is not a business does not mean that we shouldn't try to get the government to do its job efficiently.

I don't disagree with a more general carbon tax on principle (which is different from a punitive fuel tax) but I do think that it's going to be hard to enforce. Carbon emissions reporting is devilishly hard to get accurate numbers on, especially since the government in large part relies on industry self-reporting.

I don't disagree with you. But a broad-based subsidization of R&D is not the same thing as targeted, technology-specific subsidies.

It's not the same, but both are required and the government is pretty good at funding both. Where do you think most of the biomedical and green energy research dollars come from? Who do you think is funding projects like ITER? Certainly not private industry.

[K. A. Pital]

Fuel efficiency in Europe is crazy. I've seen more Smarts and Toyota IQs in Europe than some larger cars. Not to mention that late Volkswagens and Toyotas (just the two largest autocorps) have pretty decent fuel efficiency regardless of the size of the automobile.

Although Surlethe's argument can rely on the fleet being changed by slow over-years tax rises. Indeed, with a strong price pressure for efficiency, the fleet will evolve. There is simply no other way. It might take 5 years, but it is possible.