Last week, I had the opportunity last week to be on the Chuck Yates podcast where the 7 guests did "an energy draft" of policies to minimize the risk of the upcoming (current) energy crisis. Hosted by Chuck and Stacey McDonald, we had 2 minutes to put forth our best energy policy ideas to save the world.
Guests included Mark Meyer, Mark Rossano, Kyri Baker, Paul Sankey, Rory Johnston, Brad Olsen and myself. The draft was a novel concept. It was fun to hear the different ideas, 6 of which dealt with supply, only one of which addressed demand, and in my opinion, it was the the winning idea.
Paul Sankey’s concept was that a gas tax is be the best way to reduce consumer demand, and the only thing that can be done in the short term since supply is much longer cycle time. His idea was to set gasoline prices to “$8/gallon” and when oil prices are high, shrink the gas tax so the consumer still pays $8/gallon. When oil prices are low and usually, it would translate to low gasoline prices for the consumer, expand the tax to raise the revenue generated. In this way, consumers always see the same price at the pump and they actually change their behavior. If someone truly cares about climate change, they must change behaviors in consumers and the best, most efficient way to do that is in the wallet. With a venti Starbucks coffee now $3.52, up from $2.87 6 months ago, I no longer go to Starbucks.
For the whole episode, including my idea (I picked coal….), see the link below.
A lot of readers ask: “what do I read?” Here’s a sampling of some articles I read this week that were really interesting. I hope you find them as useful in stimulating your thoughts and ideas as I do.
On a side note, I have some inside market info I'd like to share with you. Anyway to get an email?
I will start by saying i usually agree with your posts. While I agree getting demand down is the easiest thing to do and raising taxes is a very easy way to get there if pushed to the extreme, this tax certainly would not go to benefit those that are hurt most by it. Even if it did in part, there would certainly be skimming off the top with bureaucrats. You might as well be taxing poor people on their income in a regressive tax system due to the unequal weight they would seeing that additional cost. It's like when (if) the SEC ever fines a company , they never provide that to those affected by the wrong doing and onlyy use it to line their pocket. It would also likely disproportionately raise the cost of home values to those areas that are closer to city centers, which people already can't afford as a way to opt out of using more gas even if they wanted to. Lastly, certainly no reason to provide any more incentive for states to continue to take advantage of the consumer. Housing taxes go up with home values for the same/similar amount of people working for the gov to manage resources, and yet they still always seem to be asking for more as if they never get what they force to begin with. Remove government intervention altogether. Even if well intended, expectations of outcome will certainly be misguided at best, and corrupted at worst.