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  • $7-A-Gallon Gas Needed to Meet Government’s CO2 Cuts

    $7 a gallon gasoline

    As the national average of gasoline creeps to three dollars a gallon, economists are warning that high gas prices in the United States could slow the economic recovery. Other countries’ economies are recovering more quickly and increased production and activity is putting upward pressure on oil prices. That coupled with a relatively weak US dollar spells trouble for American drivers. Throw in carbon dioxide cuts and gasoline prices could reach unprecedented levels:

    To meet the Obama administration’s targets for cutting greenhouse gas emissions, some researchers say, Americans may have to experience a sobering reality: gas at $7 a gallon. To reduce carbon dioxide emissions in the transportation sector 14 percent from 2005 levels by 2020, the cost of driving must simply increase, according to a forthcoming report by researchers at Harvard’s Belfer Center for Science and International Affairs. The 14 percent target was set in the Environmental Protection Agency’s budget for fiscal 2010.”

    If you think it’s out of the question, it’s not. Members of Congress are working with oil companies now to levy a carbon fee on the transportation sector: “Key senators are weighing a request from Big Oil to levy a carbon fee on the industry rather than wrap it into a sweeping cap-and-trade system that covers most of the U.S. economy. If accepted, the approach — supported by ConocoPhillips, BP America and Exxon Mobil Corp. — could rearrange the politics of the Senate climate debate and potentially open up votes that may not be there otherwise.”

    Such an approach would do nothing but cause more economic pain for American households. Higher gas prices lower employment, income, and spending, and Americans will have to dip into their savings to pay for higher gas prices. Heritage economist Karen Campbell details these effects in her paper, “How Rising Gas Prices Hurt American Households.”

    Furthermore, a carbon fee would do very little to reduce CO2 emissions. As Senior Policy Analyst Ben Lieberman points out, gasoline prices have already reached these levels in Western Europe where nations have made commitments to cut CO2, yet we are outperforming them in terms of emissions reductions.

    Higher fuel prices adversely affect just about every aspect of the economy. Food prices, for instance, will increase as it costs more to harvest, manufacture and transport food. And as the price of airline tickets rise, people will travel less. It may be easier to support these policies when public transportation is readily available – although the cost of public transportation will rise as well. However, many parts of the country do not have access to public transportation and have to drive a significant distance just to get to a grocery store.

    Indeed, the rural, poorer areas will be hit hardest by a spike in gasoline prices as residents in these areas spend a larger percentage of their income on fuel. When gasoline prices passed the $4-per-gallon mark, Fred Rozell, pricing director at a fuel analysis firm said, “This crisis really impacts those who are at the economic margins of society, mostly in the rural areas and particularly parts of the Southeast. These are people who have to decide between food and transportation.” This map provided by the New York Times shows the percentage of income spent on gasoline throughout the country.

    A targeted approach to reduce carbon dioxide emissions will give us the same results as a cap and trade system: Lots of economic pain for negligible reductions in emissions.

    Posted in Energy [slideshow_deploy]

    39 Responses to $7-A-Gallon Gas Needed to Meet Government’s CO2 Cuts

    1. Ozzy6900, CT says:

      Let me get this straight. If you levy a tax on excess CO2, that will reduce the CO2 output levels? No where in this article do I see how the level of CO2 will drop, other that the fact that we will no be able to put gas in our cars anymore!

    2. peter, D.C. says:

      I think the only way to be less dependent and affected by gas prices hike is to change our commuting travelling habits. Either to use commuter transit systems if available, of to form a carpool. I tried the driving cost calculator of the carpooling network ( http://www.carpoolingnetwork.com ) and they suggest huge savings: up to 2000$ and 1,5 tons of GHG per year.

    3. Harry Schell says:

      All this in the name of hoax science?

      Are these people just nuts or greedy for more tax money?

      This is a hugely regressive tax also. The poltical class and millionaires like Pelosi will not feel a thing. The fry cook at Denny's will drown. Where is the "justice" in that?

    4. Gman says:

      I hope this happens. This would ensure no democrat would ever get elected again.

    5. Lloyd Scallan - New says:

      Peter – Why don't we use bicycles or walk miles each morning and afternoon?

      You don't get. This is exactly what Obama wants. Why do you think Obama

      just confiscated millions of acres of land in the West that has enough oil and gas

      to supply this nation with gas for decades. Why do you think he canceled oil lease sales in the Gulf of Mexico. Don't try to blame the "oil companies" this

      time. It's all Obama and his ideology to "transform" this country into his

      socialist utopia.

    6. Mike, North Dakota says:

      Hardest hit will be food products. Farmers who use fuel to grow crops will not be able to afford to fuel up their machinery. Truckers who haul the crops to market will not be able to afford to fuel up their trucks.

      Of course if you are from Chicago or Washington DC, you may think that food just magically appears on the grocery store shelf. Just wait until that food disappears or is twice as expensive.

    7. George Payne, Havre says:

      If the oil companies (and the in their pockets congress) think that $7.00 a gallon gas will reduce the driving publics driving habits they are nuts.

    8. Al Wunsch, Fl says:

      "… sobering reality: gas at $7 a gallon. To reduce carbon dioxide emissions in the transportation sector 14 percent from 2005 levels by 2020…" To do what??? These researchers live in a tree but the American people know better. If you think the current administration's efforts that caused the formation of the tea parties, you haven't seen anything if you start artificially raising the cost of energy. As for reducing emissions (although there is no cost vs environmental improvement (that is measurable and recognizable by the individual), shifting to natural gas would most likely bring about significant improvements. That can be done, along with drilling in the U.S., while at the same time restarting the economy. Cap and Trade, Obama health care, card check – ingrediants for a hugh backlash against the government and not just with words.

    9. Al Wunsch, Fl says:

      Peter, you don't get it. This is not about the environment, health care quality or the working man, this is about destroying the democrat republic called the U.S.A. and changing it to a secular socialist based society. As for car pools, they, like a lot of things have their merit but also limitations in both their utility and their impact on the environment. These academics deal in theory and we're their experimental laboratory. They are also nuts.

    10. Mark Stricker, Arlin says:

      If "enviro-crats" (environmentalists + democrats) would simply quit breathing, CO2 emissions would be reduces by a far greater amount than changing driving habits!

    11. Dee, SC says:

      It's not just the fact that gas will become an expensive commodity that's so bad. When gas prices get inflated, so does the cost of everything else. During the gas "crisis" a couple of years ago, the cost of groceries and goods and services nearly doubled where we live….and once the stores begin charging those artificially elevated prices, they do not come back down again, but climb higher and higher with each politically-made "emergency". If our Congress lets anyone with the power to manipulate the system raise gas prices to this level, gas prices, groceries, and everything else will triple in cost. I think that we'll finally move from seeing people losing their jobs and homes to seeing people literally starving to death in America. The politicians think that they can just "tweak" our taxes and "tweak" our laws to make money just suddenly appear so they can continue their spending sprees. Well, they just might have figured out how to kill the geese that lay the golden eggs with this one.

    12. armyguardmom, IL says:

      I know it will cost more to harvest, transport and manufacture food products but those of us who harvest will not see an increase in what we receive for our commodities. Our income will be down because we are dependent on what the Board of Trade and the Mercantile Exchange give us for our products. We are the only industry that cannot set the price we should receive. But our costs will rise with higher fuel, drying and transportation. If anyone wants to get an education in Agriculture, talk to any family farmer like us. We pay for our own health insurance too. So it will be a double or triple whammy for us.

    13. Bill, Kansas City says:

      Sounds like all of our so-called representatives need to go, and we need to elect people that will represent us, not themselves and not big business.

    14. Pingback: Are you ready for $7 per gallon gasoline? | Politicallore.com/blog

    15. Mike, Wichita Falls says:

      The NYT map is interesting. A casual observer might be discouraged from rural life and move to the city where public transportation is available. Another map showing percentage of income spent on taxes, especially those taxes used to subsidize public transportation, would be useful. Might that make people living in rural areas feel better about their fuel expenditures?

      We really ought to thank rural folks for their disproportionate "contribution" to the federal and state highway trust funds via fuel taxes just like we should thank smokers for their disproportionate "contribution" to federal and state budgets (Medicare, Medicaid, SCHIP) via tobacco taxes.

      If rural folks and smokers decided on their own, or at the business end of a gun, to give up yet another liberty by moving to the city and no longer smoking, tax revenues would dry up and legislators would howl…even though the CO2 "problem" and healthcare "crisis" would be solved. Where then do politicians go for revenue, and what then is the next "crisis" devised to take away yet more of our freedom? Their next plan is never the last one.

    16. Ben C. Ann Arbor, MI says:

      If/when gasoline hits $7 a gallon can you imagine the increased sales tax revenue for federal and state governments? During the last spike I didn't hear one word from Gov. Granholm in Michigan complaining about the windfall tax revenues. Its the unintended (?) long term consequences of legislation I fear, not the imagined effects of CO2 levels.

    17. Nadia, Boston says:

      Hah! Americans elected all those "envirocrats", and you guys are just steaming mad that your party didn't win. Go stew in your own juices :)

    18. Jon Scovell Wheeling says:

      Isn't this the point? Making the product so outrageously expensive along with a propaganda machine will sway public opinion twards the way of "green" technology where the government is heavily invested. This is the point of the Statist, to control out way of life. Because the Constitution is an obsticle for them they use these means for their end.

    19. Pingback: Baby, I Can’t Drive My Car « Around The Sphere

    20. Susanna, Kansas says:

      Bring this country to its knees! I really think that is the plan. I also think Obama and his gang don't give a hoot about the American people and what we think. It is all grounds for treason.

      If this administration were SERIOUS about bringing this country back to prosperity, they would be bringing industry BACK to this country, enact tax cuts so businesses could hire and small business could thrive, produce our own gas and oil (instead of confiscating under the guise of "Monument" the very land we need for gas and oil), allow nationwide competition of health insurance, make tort reform really stick and a miriad of other common sense solutions.

      With the CO2 emissions policies they want, not only will we not be able to PUT gas in our cars, but we probably will be fined for PASSING gas in our cars.

      I wonder just who they think is going to pay for all of their spending since there are so many of us out of work. I am one of the uncounted in the unemployment figures – formerly self-employed (formerly successful) and had to give it up because of this administration and their shananigans. There are a whole bunch of people like me.

    21. Billie says:


    22. Michael, Missouri says:

      When our economy 'tanked' last year, it was due to some bank problems, overlending and such, but what most "news reports" failed to explain was that gas prices had doubled in a few short months, sending our economy into a spiral downward trend. This led to shortterm scaling back of recreational activities, impulse or luxery spending, and increased shipping cost. Also with the loss of sales tax on this type of spending, cities and counties suffered, thereby having to cut back on their budgets.

      Long story short, this was only a 2 dollar a gallon increase. If gas prices go up again, the results will put millions of people out of work, bankrupt our local governments, and the end result will be that Federal law will have to be put in place, and then…. guess what? How's all that "hope and change" working for us?

    23. Pingback: Cap and Trade Bill « Eric Olson for Congress Blog

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    25. UNRR, NJ says:

      This post has been linked for the HOT5 Daily 3/4/2010, at The Unreligious Right

    26. Barbara F Delo says:

      This tax disproportionately HURTS rural and suburban areas…another example of The Prez proposing programs that redistribute wealth and help the inner cities AT THE EXPENSE of all others…

    27. Ron Thompson says:

      Totally oblivious to the facts of nature. Believe it or not CO2 plays a huge part in the ecocycle. So we try and mess with it and in true fashion, Man dinks messing it the cycle up, and nature rips everything back to way it should be! This has been proven over and over again. Senators Graham and Lieberman need to talk to real scientist on how things really work. actually they should be voted out!

    28. Scott, Cambridge Cit says:

      Well, my business requires that I drive a truck to my client's farms. I have been consolidating my route continuously since about 2000. Fuel prices have continued to eat into my profits until they now represent over 24% of my total expenditures. $7.00 gas will put me out of business. Plain and simple. My clients will not absorb that much cost. A few would, but the bulk will not accept it.

      I had to sell my 2004 truck when gas went up to the point it was costing me in excess of $135 to fill up. I drive about 40,000 miles per year. $7.00 gas would put my outlay for fuel in excess of $18,000 a year. Unfortunately, a smaller, more fuel efficient truck is not a practical idea. I carry 1/2 ton in my bed and it never leaves it. Rural driving cuts back the efficiency and the bulk of my driving is on rural roads.

      Good luck, all. God bless and keep your ears and eyes open. I'm having a hard time believing all of this is not designed for a more sinister purpose. I'm all for conservation, but no one has explained how paying a tax to a world bank will help that.

    29. WolfGuardian, Midwes says:

      If we see $7.00 a gallon gas materialize, everyone and I mean everyone in the USA should boycott going to work for a week, do everything they can to congest highways and interstates and buy NO Fuel. This type of tactic was used last year in, I believe it was France or Spain. Shut down the whole country, that's the only way to get the governments attention.

    30. Maximus says:

      Will this be the event that triggers revolution in this country? It's just a matter of time. People, we are ruled by a tyrannical government and you better wake up before it's too late. They get their power from us but forget they work for us. Demostrations and elections do not change anything. It's time for civil non compliance. And if they use force, it will be met by force by millions of American patriots. We do not have to accept this. Stop believing everything you hear in the media and think for yourself.

    31. FatBaldnSassy, Orang says:

      If this gets through, we're gonna have a one term president on our hands.

    32. Pingback: $7-A-Gallon Gas Needed to Meet Government CO2 Cuts « Ancavge

    33. Clobber, Texas says:

      I do believe it is time for us to stand up and say NO! to what is going on. How much do we need to take before the whole country is wrecked! Revolution is only so far away when people cannot see how they can get around such problems. $7.00 gas, stupidity in the upper realms of the government, and the continued talk from the government of "I know what I'm doing" is just not going to cut is anymore!

    34. Charles Gregg, Calif says:

      An act of stupidity like this would drive our nation dowm, it would crash our econmy by doubling the cost of living on a nation that has driven its people into economic ruin already; it tells us that we have 10% unemplyed, the truth is that it is greater than twenty. We need to drive for oil and make us free of the middle east; we need hundreds of nuclear power plants to power elect cars and to reduce the cost and poluition of coal and gas power plants/

    35. The Ecologian, Arlin says:

      When Katrina caused its devastation in 2005, the gas prices rose to $5/gal in the DFW area. There were people in South Dallas who were taking their jewelery to the pawn shops to have enough money to buy gas. Though I do not prefer the ride, people if Arkansas had to place their vehicles on the blocks for they became to expensive to drive. I had adult students who had jobs and were going to college to get their BBA, who were making decisions on food or gas to go to work. Texas and the southwest are areas of wide expanses where populations are dispersed. There is no mass transit systems as they are in Chicago and the Northeast. The majority must use their car to get to and from work. Many of the college students are commuter students and need cars to get to and from classes, for they live at home in order to cut expenses. My wife commented that we use one tank of gas to go to church, to and from work, and the necessary trips to the market. That one tank of gas will cost $105 or $420 per month. It takes us use two tanks of gas to see our grand children in Little Rock; it will become to expensive to visit them! The local tourism will suffer due to gasoline doubling in price. Some cities depend on tourism as a sources of city revenue.

      This increase in tax will cause the middle class and the lower middle to suffer the most. It will drive many of these people into the next lower socioeconomic class.

      If I am correct, my grandfather had gasoline for his tractor with a fuel tax exemption. When he took his crops to be sold, he had to pay gasoline taxes. The average food item travels a distance of 1200 to 1800 miles from where the food was grown to market. Most of the food is transported by truck or by plane. This will cause the food costs to spiral. Presently the percentage of income going to food purchases is about 7-9%. This broad fuel tax increase would result in a dramatic cost increase in food. The wealthy can absorb such an economic insult while the middle class and the lower class cannot. I cannot predict the future, but I foresee the possibility of a very dismal future where the masses will suffer like Lazarus and the politically elite will have lives like the rich man who could not afford to give a few crumbs off his table.

    36. Pingback: Ready for much higher Gas prices? - Political Wrinkles

    37. Lesoyl Addiction, Mi says:

      Surely there will be a time when $300 crude oil ($7/gal) is not only possible but probable if world oil consumption continues at the current pace. Which we will begrudgingly pay as we curse OPEC under our breath and harbor disdain for the sitting President that won't release the strategic reserve so we can afford to maintain our level of consumption without altering our lifestyle.

      By this time we won't have invented or developed any sustainable energy alternatives to crude oil, to quince our growing thirst, because "we could not afford it?"

      Necessity is the mother of invention. When crude oil hit $140 and we saw $5 at the pump in places,our consumption dropped dramatically. Energy efficiency and alternative energy solutions were top priority as America's wealth was wired overseas to the suppliers to keep it flowing. As we grumbled at the pump and we got angry at the President for not releasing strategic reserves, and we we thought of ways to cut usage, and……

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    39. GRAYDON L. HUFF, SR. says:


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