Rising Gas Prices



Rising Gas Prices

Introduction

The 21st century has seen us living among inventions that boggle our minds. Not only are computers outdated within a nanosecond, but the offer has even been made, and a number of people have already made deposits, for the first ever commercial trip to visit the moon. Even with all this we are still incapable of dealing with the current fuel crisis. Interestingly enough, this fuel crisis is nothing new. From as early as the late 1970's we had received warnings that this would occur, sooner and with a much worse effect that we could anticipate. Rising prices at the gas pump appear to be having at least one positive effect: Traffic deaths around the country are plummeting, just as they did during the Arab oil embargo three decades ago. Researchers with the National Safety Council report a 9 percent drop in motor vehicle deaths overall through May compared with the first five months of 2007, including a drop of 18 percent in March and 14 percent in April. Preliminary figures obtained by The Associated Press show that some states have reported declines of 20 percent or more. Thirty-one states have seen declines of at least 10 percent, and eight states have reported an increase, according to the council.No one can say definitively why road fatalities are falling, but it is happening as Americans cut back sharply on driving because of record-high gas prices(www.webcitation.org).

Discussion

Europeans were paying the same gas prices 12 years ago that Americans are paying today. The difference is driven primarily by fuel taxes. In Western Europe, about 50% of the price of a gallon of gasoline consists of taxes. In the U.S., it's about 15%. Europeans have long been paying gas prices relatively commensurate with the social cost of consumption. The only downside of such policy, as far as I can tell, is a transportation infrastructure vastly superior to America's. While the recent price rise has been painful around the world, we must accept that higher oil and gas prices are both economically inevitable and socially imperative. Contrary to the election year pandering of some politicians, government policy should ensure that the price of gasoline can only go up (for example, a sliding tax that establishes an effective price floor). This would prevent a painful replay of the opportunities lost 30 years ago(www.slate.com).

The bottom line is that by not paying the full price of gasoline (or, indeed, any fossil fuel) we have reaped tremendous but ill-gotten gains for decades. These gains come partly at the expense of people in the developing world who endure depravation most of us can barely imagine, since the costs of climate change, including rapid declines in agricultural productivity (see, for example, Bill Cline's Global Warming and Agriculture: Impact Estimates by Country will be felt first and worst by the world's poorest people. Mitigating these impacts will require that we do what is necessary — not what is convenient. Gas prices are a test case of America's ...