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Eurobarometer: High Fuel Prices Not Sufficient Incentive for Widespread Consumer Change

28 January 2006

Eurobarom1
Only slightly more than 50% would use their cars less if fuel prices hit €2/liter ($9.18/gallon)

A European Commission survey of 24,930 consumers in the 25 Member States as well as the acceding and candidate countries determined that 77% of citizens pay attention to the energy consumed by cars (59% paying “a lot of attention”).

However, faced with a hypothetical price increase of fuel to €2/liter—that’s $9.18/gallon for those of us in the US—only 53% said they would use their cars less. Of that 53%, only 22% said they would use their cars “a lot less often.”

Given the findings on car use, the survey analysis concludes:

Other active policies are necessary to promote the use of alternative means of transport.

In July 2005, the European Commission launched a four-year campaign to raise public awareness on sustainable energy. The EC organized this Eurobarometer survey as a way to better understand the position of consumers on the energy situation.

At the top level, the survey found that while the development of renewable energies is favored by large blocks (48% supporting a focus on solar, 31% supporting a focus on wind), a majority of people (54%) are not yet ready to pay more.

Forty-seven percent of the respondents think that energy policy should be addressed at the European level, while 37% think it should be handled at the national level.

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January 28, 2006 in Europe, Fuel Efficiency, Policy | Permalink | Comments (11) | TrackBack (0)

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Here is quote from Plan B. 2.0, chapter 1, page 14
http://www.earthpolicy.org/Books/PB2/Contents.htm

"A similar situation exists with gasoline. In the United States, the gasoline pump price was over $2 per gallon in mid-2005. But this reflects only the cost of pumping the oil, refining it into gasoline, and delivering the gas to service stations. It does not include the costs of tax subsidies to the oil industry, such as the oil depletion allowance; the subsidies for the extraction, production, and use ofpetroleum; the burgeoning military costs of protecting access to oil supplies; the health care costs for treating respiratory illnesses ranging from asthma to emphysema; and, most important, the costs of climate change.36 If these costs, which in 1998 the International Center for Technology Assessment calculated at roughly $9 per gallon of gasoline burned in the United States, were added to the $2 cost of the gasoline itself, motorists would pay about $11 a gallon for gas at the pump. Filling a 20-gallon tank would cost $220. In reality, burning gasoline is very costly, but the market tells us it is cheap, leading to gross distortions in the structure of the economy. The challenge facing governments is to incorporate such costs into market prices by systematically calculating them and incorporating them as a tax on the product to make sure its price reflects the full costs to society.37"

Getting half the population to drive less is a big deal.
And perhaps the other half needs to drive, regardless of the cost?
Restructuring cities (much more urgent here than in Europe) and deveoloping plug-in hybrids will allow people to still drive but reduce the cost. It will also reduce the negative externalities that argod mentioned.

While I think it would still make sense to levy a hefty tax on gasoline to encourage the use of more efficient vehicles and less driving in general, it is still necessary to provide each citizen with a certain number of carbon credits at the beginning of each year which are sellable on the market place (e-bay, for example). This is based on the premise that we should have specific goals for carbon reduction and then restrict the amount of carbon emitted accordingly. The poor, who generally use less energy anyway, would benefit from such a scheme since they could sell their credits to the rich and/or profligate. Those who conserved, regardless of income, would also benefit and would be rewarded for their conservative behavior.

As it is, if one conserves, one may get some personal benefit from the savings, but has to sit by and watch the rest of the country consuming like madly with no overall benefit to the society or the world. Many of us have cut way back on our energy consumption but the overall level of carbon emissions in the U.S. continues to increase.

In the short term, higher gas prices won't have much effect because people are pretty much locked into their commuter patterns dictated by where they live. So, even if one is inclined to save energy, there is only so much one can do in the short term, especially given economic constraints. Over the longer term, however, changes can be made in housing, location, transportation, etc., responsive to higher prices.

Collecting and exchanging carbon credits per individual vehicle could become an administrative nightmare. A simpler way to achieve similar results could be:

1) To gradually increase gasoline/diesel fossil fuel tax to the European average.

2) To apply a yearly bi-directional vehicle tax relative to the fuel consummed and/or GHG emitted above/below predetermined levels. For example; vehicles averaging 40 mpg and 5 tonnes GHG could have zero tax; vehicles doing better than 40 mpg would get variable refunds (negative tax) and vehicles below 40 mpg would have to pay a variable yearly tax. The yearly (negative or positive) tax could vary from $10 to $1000 per vehicle. Well adjusted, the net effect could be neutral but would benefit the users of the most efficient vehicles and neutralize part of the extra fuel tax.

While it is a good idea to reward those who have vehicles with good gas mileage, it doesn't necessarily reward those who emit realatively small amounts of GHG. Should the person with 40mpg but drives 20,000 miles per year receive a bigger reward than the person with 20mpg but only drives 5,000 miles per year.

If people are getting high mpg vehicles so they can live even farther from work, I don't think we're rewarding the right behavior.

I think we have the technology to make carbon credits work. For example, it could be integrated with one's credit card or other magnetic card and read at the pump. In the virtual world, we already have extremely sophisticated trading mechanisms. If we can run a stock market and a banking system, we can run a carbon credit system.

But I guess I have to acknowledge how screwed up the medicare drug bill has turned out. It just goes to show you can make anything impossible if your main objective is satisfying special interests and now providing inexpensive drugs to seniors.

"It does not include the costs of tax subsidies to the oil industry"

Oil companies aren't subsidized, they pay billions in taxes. In fact the U.S. has one of the highest corporate income tax rates among OECD countries. How about actually developing an alternative to gasoline instead of blaming private companies for the current energy situation. Taxing is the lazy socialist's solution to everything. True progress comes from ingenuity.


The survey is interesting. But as Sam L notes getting half to reduce is pretty impressive.

Don't expects immediate reduction as fuel prices rise.

The payoff comes when buying the next vehicle, one offering better mileage. The other payoff comes when they choose to live closer to work or to public transportation networks or otherwise make major change.

These may not be happy choices or be made quickly but people choose what is necessary.

" In fact the U.S. has one of the highest corporate income tax rates among OECD countries"

According to CBO, you are wrong.
http://www.cbo.gov/ftpdoc.cfm?index=6902&type=1

I can say a lot about your other statement, but I won't because you
probably don't believe in Global Warming, Evolution, and even Statistics, so
you can take facts somewhere else.

If you're going to source, try citing a page instead of expecting someone to read an entire report.

For instance, page 36 of that report shows the U.S. having the third highest statutory corporate tax rate among OECD countries.

Here's another source for you that summarizes the same information:

U.S. Corporate Tax Rate Highest in OECD, Says New Study
http://www.taxfoundation.org/press/show/1186.html

Now excuse me while I go polish my guns and prepare for the apocalypse.

There are two sides to this:
-Cost of status quo -- higher energy prices.
-Cost of change -- higher cost of alternatives.

Technological progress is the solution -- spend less money on things that are better for the environment. The idea that things can be forced on the market at high cost is a bit quixotic. Spend 2 orders of magnitude less on research, wait 5 years, then reevaluate.

It is one thing to have high corporate tax rates and another thing to collect them. Because the US tax code is full of exemptions, deductions, credits, and allowances 60% of US corporations pay absolutely no federal taxes. These are the hidden subsidies to business which everybody else must compensate for through higher personal taxes and decreased government services. For instance the amount disabled veterans must pay to the VA for medications is 13% higher this year over last year.

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