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We tax road fuel as a proxy for road usage; it’s mostly a use tax. Use taxes are nearly optimal policy. Carbon taxes (Pigouvian taxes) are a solution to the p
by anonuser123456 3y ago
We tax road fuel as a proxy for road usage; it’s mostly a use tax. Use taxes are nearly optimal policy.
Carbon taxes (Pigouvian taxes) are a solution to the problem of pricing externalities by incentivizing alternatives. The tax creates a wedge where consumers choose alternatives.
Incentives matter and produce better outcomes by changing behavior.
- xienze 3y agoIf you’re going to tax gas into oblivion, you better have an affordable alternative fully ready to go or people will lose their minds. And no, “just buy a $50K electric car” isn’t a viable solution for a large segment of the population.
- anonuser123456 3y agoToday it’s not viable. But we don’t have to implement this as a cliff function. Start at 50$/ton and increase it to 500$ over 20 years. This gives industry a major signal to invest for the down the road changes and for technology to develop/business to adapt. With the right signal, by 2035 BEV will be cheaper than ICE. This of course assumes we don’t let the Sierra Club prevent us from mining lithium to protect some random beetle in the desert.