Gas prices have been rising, though you may not be aware of it because they are still extraordinarily low.
In fact, heading into the Memorial Day weekend, they were than they were at the start of the summer driving season for the last 11 years. Americans are hitting the highways, as in The New York Times noted, racking up mileage in road trips large and small.
Nevertheless, those low price levels have masked what appears to be the beginning of a trend: In , the says, the average price of a gallon of regular has gone up 17 cents nationally. On Friday, that average was above $2.37.
What’s more, the latest numbers suggest that many car buyers understand that gas has been getting more expensive. Americans on average have begun to shift back to more fuel-efficient vehicles, the University of Michigan .
That’s good news. And it’s an opportune time to consider whether we should take steps that would keep prices moving in the right direction: upward.
I’m not a fan of expensive gas for its own sake. I drive a car, mainly on weekends, and prefer to pay less to fill the tank, like everybody else. But rock-bottom prices encourage behavioral patterns that aren’t beneficial — not if we want to reduce emissions of greenhouse gases and other pollutants.
The markets are likely to do that job for a while. While they have given up some ground lately, oil prices have almost doubled since February, so we can expect that gas at the pump, which typically trails wholesale oil prices, will continue to climb in the short term. No one knows, of course, where oil or gas prices will be a year or two from now.
But another measure to raise prices and affect consumer behavior has long been favored by a of economists. That is a national tax on carbon or, more narrowly, a booster tax on oil or gasoline — all of which have been opposed by Congress. On Friday, the House of Representatives voted, largely along party lines, against both a carbon tax and a tax on oil.
Nonetheless, a broad carbon tax or a narrower gasoline tax surcharge would generate revenue that could go toward neglected infrastructure, like bridges, tunnels, trains and subways, or toward improvement of renewable energy sources, reducing dependence on fossil fuels directly. But it could also be used to offset cuts in other taxes, as proposed in . Either method could make gasoline, and other forms of carbon, expensive enough to make people think twice before burning it.
There is evidence that when prices drop, as they did over the last few years, people shift to bigger, less-fuel-efficient cars. In the recent low-price gas world, I’ve found myself dreaming about replacing my miserly compact — a little Subaru Impreza — with a more generously sized model, one with enough space for skis and boots and boxes and luggage and other assorted pieces of paraphernalia that I might want to cram into the vehicle one day.
I don’t think that way when gas prices are high, as they were until fairly recently. Recall that a gallon of regular cost more than $3 two years ago, and more than $4 in 2008.
Those high gas prices contributed to a virtuous cycle in consumer behavior, according to statistics provided by Michael Sivak, a research professor at the University of Michigan Transportation Research Institute.
Here are a few important numbers.
Fuel economy rose fairly steadily to 25.8 miles per gallon in August 2014 from 20.1 m.p.g. in October 2007. (Those figures are for newly purchased light-duty vehicles — cars, light trucks and sport utility vehicles.) Then, based on ratings, fuel economy of new vehicles reversed course, as I in a column in December. It dropped as low as a gallon that month, as gasoline prices plunged a gallon.
But as gas prices rise, people are shifting back toward more environmentally friendly models. This fuel economy measure rose to 25.4 miles per gallon in May — up 0.2 miles per gallon in one month. In an email, Mr. Sivak said, “The improvement likely reflects the increased price of gasoline in May, and the consequent increased interest in more fuel-efficient vehicles by buyers of all vehicle classes.”
How you view these current fuel economy levels depends on your point of comparison, he observed. It is “down 0.4 m.p.g. from the peak reached in August 2014, but still up 5.3 m.p.g. since October 2007,” when his institute began compiling this statistic.
In short, when gas is really cheap, Americans are likely to buy less fuel-efficient vehicles and drive more, which we’ve already seen happen.
Higher fuel prices tend to make vehicles like , hybrids and smaller, gas-sipping internal combustion engine vehicles more appealing. In a separate , Mr. Sivak and Brandon Schoettle, a project manager at the institute, calculated that a major improvement in the fuel efficiency of the nation’s light vehicles, including old and new vehicles, to 56 miles per gallon from 21.4 miles per gallon today, would, by itself, reduce total fuel emissions in the United States 10 percent.
Big as that change would be, it would not be enough to meet the goals of last December’s Paris agreement on , which would in the world to reduce greenhouse gas emissions. Consider that President Obama has pledged that the United States will . Emissions from many sources, particularly those from coal-fired power plants, would need to be reduced, though the Supreme Court put some of those regulations into a state of limbo with a decision in . Further legal challenges are underway.
In the meantime, gasoline prices are inching higher. Adding a modest gasoline tax of, say, 25 cents a gallon — or a more ambitious carbon tax — would magnify and consolidate that upward trend.
Given opposition in Congress, it is unrealistic to imagine that either kind of national tax will be enacted right now. Bernie Sanders was the lone major presidential candidate in the race in June to have called for a carbon tax, according to an assessment by . Yet such a tax, or a variation favored by President Obama known as “,” makes , the World Bank and International Monetary Fund have concluded.
One problem with such taxes — aside from the glaring fact that taxes are generally unpopular — is that they tend to be regressive. A gasoline tax, for example, burdens low-wage people who must drive to work, but tax credits aimed at low-income car commuters could offset this.
Taxes and prices affect behavior in fairly predictable ways. Without taxes, the benefits of higher prices can be expected to flow mainly to energy companies and their investors, and Wall Street will certainly calculate those effects. But we all have broader interests, and it may be that the best thing we can do for ourselves and the environment is impose a tax.