Be Careful What You Wish For: Hardship of high gasoline prices previews the impact of emission controls
In 2006, at the end of his movie An Inconvenient Truth, Al Gore offered a number of things that the average person could do to decrease their impact on global climate change. They could ride a bike or take mass transit, the former vice-president advised. They could drive a fuel-efficient car, and they could drive less. Two years later, people are evidently making those choices in large numbers. But it’s not because of Mr. Gore, or Sheryl Crow, or Leonardo DiCaprio. It’s because of rising gas prices.
With the cost of filling up the gas tank inching ever higher, the Federal Highway Administration reports that Americans are driving fewer miles. Nationwide, ridership in mass transit is up, not only in cities like New York and Boston where public transportation is already commonplace, but most strikingly in cities in the south and west where the driving culture has long been strong. Sales of bicycles and scooters are also up. Bicycle dealers from Washington State to Buffalo, New York, are reporting increases in business as much as 20 percent, and consumers are also loading up on bicycle baskets to carry more with them as they ride.
Purchases of lower-efficiency vehicles are down, while interest in more efficient hybrids is up. In the first quarter of 2008, SUV and truck sales decreased a full 28 percent. In contrast, dealerships that sell the popular Toyota hybrid, the Prius, can’t keep up with demand, and at the end of May a new Prius averaged less than a day on the lot before being sold. Overall, U.S. Department of Energy statistics show declining demand for gasoline since October 2007.
All these changes may be having an effect. The burning of gasoline in internal combustion engines accounts for about a quarter the country’s carbon dioxide emissions. The federal Department of Transportation estimates that greenhouse gas emissions for the first quarter in 2008 were down roughly nine million metric tons over the same time last year, and expectations are that 2008 will be another year of decreased net emissions in the United States.
Ironically, many of the same people calling for emissions reductions are now asking the government to act against the high gas prices by enacting a “windfall profits tax” on oil companies. The problem, of course, is that increased gas prices, or increased energy prices in general, can be a significant hardship for people who do not have plenty of discretionary income. Likewise, for some, lifestyle changes are difficult to achieve, practically and economically.
The pains of increased gas prices are akin to what we could expect, at least in the short term, with emissions controls across the energy sector. Those controls would unavoidably increase the cost of power to either consumers or taxpayers, who are, needless to say, more or less the same people: everyone. It would certainly be convenient if, in the face of concerns over global climate change, we could transform our energy economy painlessly and without cost.
Unfortunately, that’s not how things work. Change is expensive and uncomfortable – especially change of the magnitude that some have suggested. To address the issue of climate change, Mr. Gore has called for an 80-percent reduction in emissions. Those in a position to set policy should strongly consider the potential impact of emissions reduction policies on the average American. Today’s gas-price situation offers a convenient preview.