BIKE: Taxing cars by the miles

[alan_drake]

-- Roger Baker <rcbaker> wrote:
Don't worry. Every clever creative highway funding scheme both here and 
in California is similar to discussing the best way to arrange the deck 
chairs on the Titanic.

>when oil demand is largely inelastic.

There are two components to demand elasticity, short-term (which has limited policy implications) and structural (which we saw post 1973 and will likely see again).

A review of CO2 production by nation (I posted link earlier, but on holiday now and link is inaccessible) shows a significant drop in most nations after 1973, including the US.  Some of this was fuel efficient vehicles (SOV hybrids & turbodiesels are fuel competitive with buses), some mass transit (DC Metro carries ~38% of DC commuters and was built in response to 1973), etc.

In summary, structural demand for oil is price elastic. Not 1:1 but more like 4 or 5:1.

> Oil is back up to about $50 again and should continue to rise

I predict sub $50 oil average for 2005 (but $40+), with mid 2006 being the start of a price increase.

> The theory that American drivers are insensitive to gasoline prices is 
largely true over the short run but not over the long run, as the sharp 
fuel price increases during the 1970's demonstrated. When prices pinch 
their wallet, drivers eventually buy smaller cars or move closer to 
work or shift to alternatives like bikes.  -- Roger

Two thoughts contrary to the prevailing wisdom here.

Unconvential oil is price competitive @ $80 to $100/barrel. This is the likely long term upper limit (with spikes above that).

Americans can afford to live their current life styles with 60 mpg hydrids and 50 mpg turbodiesels & $4.50 gallon fuel.  Congested roads, highway fatalities, global warming, sprawl consuming farmland, etc. are all the negative consequences of "more of same, but higher mpg".

$4.50/gallon diesel will limit bus based transit.

We will have a transition period and I HOPE that we can also transition many American lifestyles as well during that period.

IMHO, the most effective means of transition is funding rail transit with parking space taxes.  The high cost of parking impacts more commuting decisions than anything else, including fuel & congestion.

Tax "big box" shopping, office, apartment, new homes, ec. parking spaces a general $200/year and $500/year if they are in a rail served "watershed" is one possibility.

Alan