Fuel Economy and Café Standards
Generally, richer and economically advanced countries have higher gas prices compared to poorer or gas producing countries. However the US is an exception; despite being economically superior, the gas price is low. For the period between 2nd February 2015 to 11th May 14, 2015, the world average gas price was 1.38 compared to 0.69 for the US.
The price of gas in a particular country can be used to regulate the consumption by use of taxes or subsidies. The introduction of gas tax would make gas more expensive and therefore people would drive less. Subsidies on the other hand reduce the cost of gas and consequently increase consumption. A good example is Venezuela, where the government has greatly subsidized the gas.
Increasing the gas tax in the US will increase the price per gallon and the increased gas prices will cause a decrease in consumption. This was witnessed in 2008 in the US when the price increased beyond $4 a gallon, which led to gas use falling by 4%. People would also consider more fuel-efficient cars; prompting carmakers to develop them. These gas-sipping hybrids would cover more distance on the gallon. This would further reduce the consumption of gas.
In the long run, increasing the gas tax would be a smart move as it would go a long way in reducing the emission of carbon in the atmosphere by reducing fuel consumption. This will help in controlling climate change and a big step in the battle against global warming. The decreased pollution will also help with environmental issues like acid rain and health issues like asthma; leading to better health and better agricultural productivity.
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There will also be less congestion as less people will drive and consequently fewer accidents.
Despite the obvious benefit of increasing the gas tax, the price should not be allowed to shoot too high. For a country like Norway, the average value was 2.01 for the period between 2nd February 2015 to 11th May 14, 2015, compared to the world average of 1.38. For Denmark, the average value was 1.76 in the same period. Such high prices need to be kept in check by use of such things as subsidies. The tax should also not be set too high so as to hurt the people.
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