Last night, in a wide-ranging State of the Union address, President Bush outlined a series of proposals to cut energy consumption, reduce America's dependence on imported oil and curb a significant amount of the carbon dioxide emissions that are fueling global warming.
Among those proposals was a call to reduce gasoline consumption by increasing the average fuel economy of new cars by 4 percent per year for passenger vehicles starting in 2010 and for light trucks starting in 2012. Combined with a requirement to increase the percentage of ethanol and other renewable fuels, the increased standards would cut vehicle emissions by 10 percent by 2017, the president said.
We welcome every effort to stem global warming and increase the nation's energy independence. The proposal was especially welcome from this president, who has been slow to recognize the threat posed by global warming.
But the president didn't go far enough. The Corporate Average Fuel Economy rules he calls for, for example, would, in the name of safety, continue to set much lower fuel economy standards for bigger, heavier trucks. That helps preserve the incentive to purchase SUVs and other gas hogs, which makes driving more dangerous for people in small cars. To remove that incentive, the fuel standards should apply across the board.
What's really needed, along with an increase in fuel efficiency, is an increase in the federal gas tax. It has been frozen at 18.4 cents per gallon since 1993. Plans to raise the gas tax to discourage consumption and encourage changes in the auto industry have been around for years. None have won broad political support, but an increase is needed.
A plan sketched out by Harvard economist Greg Mankiw suggests one direction to pursue. Mankiw calls for a $1-per-gallon tax phased in at the rate of 10 cents per year to allow consumers and the auto industry to adapt. The tax increase would push manufacturers to increase fuel efficiency standards on their own. And since higher prices would lead to a drop in consumption, world oil prices would decline. That would reduce the real impact of the tax increase on consumers. It would also mean that less money would be exported to places where terrorists could get their hands on it.
The apparent pace of global warming justifies an even steeper tax increase. But the gas tax, like all sales taxes, is regressive. It hits people with lower incomes, older cars and long commutes much harder than high-income suburbanites who drive SUVs, and it has little or no effect on people who take public transportation.
Like all tax increases, raising the federal per-gallon levy will create winners and losers. But that doesn't mean that an increase, if properly designed to protect the poor, shouldn't be instituted.
We applaud the heightened focus on the environment the president showed last night. His proposals show that he's taking the twin problems of energy dependence and climate change seriously. Everyone should.
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Monitor editorial