I get mad when I read something like this:
Residents of a suburban London district will soon pay annual parking fees based on how much carbon dioxide their cars emit, penalizing owners of gas guzzlers.
...but maybe not for the reason you think*.
I drive a gas guzzler--by any definition--and I have absolutely no problem with a policy that would charge me the external cost of my gas consumption. The problem I have is with the graduated parking fee proposal itself:
Cars with smaller engine sizes will receive a 50-per-cent discount on the current $230 cost of a parking permit. Cars with larger engines will have to pay higher prices.
It makes the solution too complicated and it doesn't target the real problem: DRIVING. Suppose Ian and Graham (good English names, don't you think?) live next door to each other and both own Hummers. But, Ian drives his Hummer 20 miles to work each day, while Graham drives his 5 miles. Who is causing more damage? Who should pay more?
Under the current proposal Ian and Graham would each pay the same amount. But that doesn't seem fair--I'm crossing my arms and stomping my foot with a "hmmmph!"--and it definitely isn't economically efficient. So what's the solution? Easy, charge people a fixed amount per litre of petrol consumed (like how I used the English versions there?). We could call it a 'Fuel Conservation Encouragement Consideration' or as John likes to call it, a gas tax.
An increase in the gas tax has all of the same incentives as the graduated parking fee: The incentive to switch to smaller more fuel efficient cars, but it has the added incentive of reducing miles driven in your current car and discouraging additional driving once the switch to more fuel efficient cars takes place. With the parking fee, there is no guarantee that miles driven or gas consumption will decrease. With a gas tax there is.
See how it all goes back to 'Drive Less!'*?
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*Then again, maybe it is for the reason you think.
**For those new to Env-Econ, "Drive Less!" is an answer to the question "What can we as consumers do to bring down the price of gas?" "Drive Less!" places the burden on drivers to take action. Gas prices are high because drivers are willing to pay high gas prices. "Drive Less!" and gas prices will fall.
