Julian Spector is a former editorial fellow at CityLab, where he covers climate change, energy, and clean tech.
The proposed $10 per barrel fee would fund a massive overhaul of the country’s transportation system.
Some ideas are worth saying even if nobody wants to listen.
That may have been on President Obama’s mind when he decided to propose a fee of $10 per barrel of gas to fund a titanic overhaul of the nation’s transit infrastructure. The charge would scale up over five years and be paid by oil companies, who could be expected to hike their rates to recoup the loss. The White House released the proposal Thursday in advance of a larger budget proposal to be unveiled next week.
The plan calls for fighting climate change by making gas more expensive and using that revenue to move away from car-reliant transportation. The White House memo frames this as a long-overdue update to Eisenhower’s Interstate Highway System. Instead of subsidizing roads through cities and the countryside, Obama would prefer to invest in traffic reduction, high-speed rail, freight modernization, and autonomous vehicles.
The move comes not long after Congressional Republicans bent over backwards in December’s budget negotiations to open up crude oil exports on behalf of domestic producers. They have a strong preference for cutting taxes rather than raising them and for encouraging American energy jobs, not threatening them. Given how strongly politicians avoid raising fuel taxes in particular, getting a GOP-controlled Congress to approve a flat fee on each barrel of oil will require Herculean fortitude, to say the least.
That’s not to say the proposal isn’t valuable in its own right. Environmental groups haven’t been talking much about carbon pricing lately. They’ve been more interested in pushing the message of “Keep It in the Ground”—cutting off the extraction of fossil fuels from federal lands. That policy could trim fossil fuel supply in the long term, but it doesn’t address the massive glut of oil that’s currently pushing gas prices into the bargain bin.
Carbon pricing is gaining momentum, but mostly in rarefied circles of economists and policy wonks. Elected officials haven’t been eager to touch it, because although it offers an efficient, market-based solution to the negative externalities of carbon consumption, it also carries the unfortunate side effect of making gasoline more expensive. Interestingly, though, leading environmental advocates haven’t been pushing for carbon pricing in a big way, either.
In other words, this new gas tax proposal marks a president positioning himself at the vanguard of the environmental movement. While green stalwarts call for an eventual tapering off of fossil fuel extraction, Obama wants to make gas harder to burn starting now. Then he wants to use the money raised from gas consumption to improve America’s transit options, so people don’t have to burn carbon in the future when they travel.
Obama is outflanking mainstream environmentalism with big ideas. Sure, he’s provoking plenty of irate “tax and spend” dissent, but he’s taking the conversation about greenhouse gases to a bolder place, one that could yield some real benefits down the road.