US government: $28 carbon price would raise gas prices by 25 cents
October 9, 2008
Congressional Budget Office study finds $200/ton carbon tax would only raise gas prices $2 per gallon
A national carbon price under a cap-and-trade system would have a limited impact on gasoline prices, reports a new study by the Congressional Budget Office (CBO).
The report estimates that a carbon price of $28 per ton — a bit less than current carbon prices in the European market — would boost gas prices by 25 cents per gallon, while a $200 per ton tax would increase prices by less then $2. The findings suggest that the cost of climate change legislation may be lower than claimed by industry, but also indicate that efforts to curb Americans’ driving habitats via a carbon tax or cap-and-trade scheme may be of limited effectiveness. A $2 increase in the price of gas would still leave U.S. fuel prices well below those in most of the world.
Crude oil imports by country of origin, thousand barrels per day in 2005. Source: DOE/EIA.
"Charging a price for CO2 emissions would raise the price of gasoline, but that increase—and the resulting decrease in vehicle emissions—would be relatively small," states the report.
"Although a CO2 emissions price would have relatively little effect on vehicle emissions, it would stimulate additional research and development of technologies for improving fuel efficiency, an effect that the new fuel economy standards will also have. New fuel-efficiency technologies will, in turn, create additional opportunities for reducing atmospheric CO2 concentrations and stabilizing Earth’s climate. "
David Austin. Climate-Change Policy and CO2 Emissions from Passenger Vehicles. Congressional Budget Office. OCTOBER 6, 2008
The use of miles-per-gallon instead of gallons-per-distance to measure fuel-efficiency may be clouding Americans’ judgement when it comes to choosing whether to take the worst gas-guzzling vehicles off the road, argues a new paper published in the journal Science.
To reduce its growing dependence on foreign oil the United States could implement relatively low-cost measures to put millions of super efficient vehicles on American highways, said energy efficiency expert Amory Lovins of the Rocky Mountain Institute in a speech at Stanford University. The measures could significantly cut oil usage, help fight climate change, and make U.S. roads safer.
The United States could dramatically cut oil usage over the next 20-30 years at low to no net cost, said Amory B. Lovins, cofounder and CEO of the Colorado-based Rocky Mountain Institute, speaking at Stanford University Wednesday night for a week-long evening series of lectures sponsored by Mineral Acquisition Partners, Inc.