WARNING-Back of the envelope analysis follows. Although based on numbers taken from reputed studies, methods may vary across sources.
Suppose we want to decrease CO2 by 20% (roughly the level required by Kyoto). If we want to accomplish the decrease by cutting CO2 emission across the board by 20%, that would mean we need a 20% decrease in emissions from automobiles. One way to do this is to decrease the number of miles travelled by car. According to my calculations, gleaned from an extensive search of stuff posted on the internet, an increase in the price per mile driven of 74% would just about do it (the gory details are at the bottom of the post). Based on gas prices only, currently about $2.50 per gallon, the price per mile traveled is about $.14 per mile. A 74% increase would be about $.10 per mile.
So here's a proposal. At the end of each year, for each registered car a driver will pay $.10 per mile traveled. Mileage will be recorded at the annual emissions inspection in states that have them, or for states that don't have annual inspections, we'll work something out. For the driver that travels 12,000 miles in a year, this would require a payment of $1,200 per year for each car.
According to my calculations, this would reduce total CO2 emissions by 155,000,000 pounds in the U.S. This may be an overestimate because I've ignored the possibility of substitution to other forms of transport, such as public transport, that may be CO2 emitters also.
How close does our back of the envelope analysis come. Let's take a look at what our own government says about the Kyoto protocol:
To achieve these ends via market-based means, average delivered energy costs (in inflation-adjusted 1996 dollars) must be between 17 and 83 percent higher than projected in 2010.
At least I came within the government range (but that's not too hard since that range covers 66%).
Now ask yourself, are you willing to pay $.10 per mile traveled to decrease your CO2 emissions to Kyoto standards? Just curious.
OK, now critique.
The Gory Stuff:
Various researchers have estimated the change in vehicle miles traveled from a change in the price of travel per mile (called the elasticity of demand for vehicle miles traveled). A 1% increase in the price per mile driven will cause a decrease of between .15% (found here) and .67% (found here) in the number of vehicle miles traveled. To make things simple, I'm going to assume a number somewhere in the middle, .5%. So for every 1% increase in the price of a mile driven, actual miles driven will decrease by 1/2 percent.
The typical vehicle emits 19.4 pounds of CO2 per gallon of gas consumed (here). Assuming an average fuel economy of 18 miles per gallon for passenger vehicles (here) gives an estimate of 1.1 pounds of CO2 per vehicle mile. In 2000, the U.S. emitted approximately 3.1 trillion pounds of carbon dioxide (all sources) and vehicles traveled approximately 1.6 trillion miles on U.S. roads. Converting the 1.1 pounds of CO2 per vehicle mile to percentage terms gives an estimate of .53% change in CO2 emissions for a 1% change in vehicle miles.
Combining what we know so far (or have guessed at), for every 1% increase in the price of travel per mile, travelers go .5% fewer miles. And for every 1% decrease in miles traveled, total CO2 emissions in the U.S. decrease by .53%. Multiplying gives an estimate of the price elasticity of demand for CO2 due to vehicle travel of .27% (this economics stuff is complicated). Meaning that a 1% increase in the price per mile traveled will result in a .27% decrease in to CO2 output. To get the required 20% decrease in CO2 we would have to increase the price per mile traveled by 74% (20/.27).
