Tuesday, November 22, 2005

Fuel is not expensive in the US

One of my pet peeves is the complaint against so-called "high prices of oil". This is especially annoying in the United States where they have the cheapest gas in the whole developed world - and the most outrageous means of transportation. But as usual, the US are not too outward-looking and probably ignore, in large majority, that they are getting a deal at the expense of the rest of the world who's making efforts to curb consumption.

Those who say that the demand for gas is not elastic - that oil is the only fuel to get you there - are missing the point (debunking this myth was what got Paul Krugman going as a professional economist in the 70s). Here are a few ways to reduce consumption:

- Get smaller cars
- Walk or bike
- Combine trips

The lack of fuel taxes in the US is a problem that the whole world has to live with. If only they were interested in what the world does and discusses, they might realize the burden that they represent and stop whining. Thank goodness, some are more enlightened on the issue.

Update: Indeed, there are many voices now discussing the positive aspects of higher gas prices. I'm not too keen on ethanol and biodiesel, but at least it gets the debate going on the effects of gas consumption. What Spencer Reiss doesn't mention is that gas taxes can also be turned into subsidies for new technologies. Yes, it is sometimes necessary to intervene in the market to speed things up, especially when health and the environment are at stake.


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