Hidden costs of cheap gas

Marni Pyke's Dec. 14 article on low gas prices explains why gas prices are low, but doesn't adequately explore what low prices do. Yes, low gas prices help households cope financially, but they also weaken the argument for switching to more efficient and cleaner technology: Why bother, when it costs so little to stick with what you've got? This slows adoption of more efficient vehicles and EVs, compared to where it would be if gas remained at last year's price of $2.82.

It's easy to portray low gas prices as an unqualified good, but there are hidden costs in air quality, and in damage to earth's climate. As the article points out, the government's promotion of efficient vehicles and better batteries have had some success, and EVs now account for 2% of new vehicles. But these efforts may also contain seeds of their own sluggishness, as they tend to push down fuel prices.

To fix this, economists including George Shultz and Janet Yellen advocate enacting a small but steadily increasing fee on the greenhouse gas content of fossil fuels, paid by producers and importers. The fee would in part be passed along, resulting in higher fuel prices. To mitigate this, all revenue from the carbon fee would be returned as a uniform rebate to households, for financial support. But the price still gives them the incentive to be careful of their fuel use, switch to a more efficient drive, or to an EV. By doing that, they win: they avoid the carbon fee and keep their costs low, while they keep getting the rebate, which is the same for everyone. And we all win, with healthier air, faster growth of affordable clean energy innovations, and a climate which we can pass in good shape to our children and grandchildren.

Wharton Sinkler

Des Plaines