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Policies that result in the use of less gasoline will reduce carbon dioxide (CO2) emissions. With the key assumption that the theory of man-made global warming is correct, the logical conclusion must be that a reduction in gasoline useage must result in less global warming, compared to the previous outlook.

Of course, if the theory of man-made global warming is grossly flawed, reducing gasoline consumption will not make a dent in global warming and there would be no need to discuss gas taxes in this context. Therefore, the following discussion is based on an assumption that the theory of man-made global warming is essentially valid.

HOW TO REDUCE GASOLINE CONSUMPTION

One way to reduce gasoline consumption would be to institute laws that take vehicles off the road. The odd-even license plate rule for filling your gas tank, during the 1973 gas crisis, resulted in the use of less gas, although the effectiveness of that policy is debatable. However, the vast majority of drivers would not want such a rationing system to be implemented again, unless we were to experience supply problems again.

As long as supply is not shut off, the most direct, effective way to reduce consumption of gasoline (or any item) is to increase the price.

The demand for gasoline is not directly proportional ("linear") to price changes. When the price is relatively low, a small price increase has very little effect on demand. However, as we have seen in the US recently, a price increase has a much greater effect on demand when the price is already high.

Increasing gasoline taxes has the same basic effect on demand as if the price goes up for any other reason. However, if future car buyers know that gas taxes will increase, and be maintained, they will use that information to buy cars with higher gas mileage. In this way, increasing gas taxes has a stronger effect on gasoline demand than general prices increases, which we know can go back down quickly.

EFFECT ON GLOBAL WARMING

There is a very real possibility that, even with a large reduction in the use of gasoline in the US, we may not see an actual reduction in global warming, compared to current levels. Therefore, for comparison purposes, we need to set a benchmark performance level.

The appropriate benchmark for comparison is the level of global warming that would be reached many years in the future, if higher gas taxes, resulting in lesser gasoline consumption, are not implemented in the very near future.

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