Case study - Trade-offs and global warming – 9 May 2007

When we hear an elected official blither on about the scandal of high gas prices, which is a sign that global warming is way down the list of priorities. Sticker shock at the pump does more to increase conservation than any other policy. This is trade-offs, you cannot have both cheap gas and a serious global warming policy; you cannot both subsidize U.S. farmers and have efficient bio-fuels. For example, the more politician talks about U.S.-produced bio-fuels, the less serious he or she is about either oil dependency or global warming. Because it takes a lot of energy to grow, move, and convert corn into energy. Determining the energy balance between corn-based ethanol and conventional fossil fuels was so close that it was really just a matter of definition. Taxing the sources of global warming is the most efficient and cheapest way to deal with the problem. This tax can work to change people’s habits; smart policy recognizes this as a fact of life.