Australian Lefty on Politics, Governance, Science and Info Management

Help productive, not discretionary, oil use

Posted by Dave Bath on 2008-06-01

It’s disappointing that the KRudd government didn’t see a "have your cake and eat it too" solution to the hoo-hah over fuel prices, one that would stop the opposition bleating, and yet would not trouble economists nor the environmentally sane.

Cutting fuel taxes in the rich world makes no sense either.

The politically smart solution would have been to give a rebate to those who used fuel to travel to work efficiently – a rebate for car-pooling.

Political parties should increase costs costs of discretionary fuel use compared to use that generates income, while encouraging greater efficiency in how oil is used.

If you ferry another worker, you could get a pro-rata rebate based on as-the-crow-flies kilometres, and the number of workers you carry.  Perhaps GPS boxes, becoming common, could be used to pinpoint start and stop points (and also provide excellent data to transport planners).

This softens the blow of rising fuel prices when generating income, decreases congestion (increasing traffic flow and fuel efficiency), decreases fuel demand, and increasing responsible behaviour.

The first two oil shocks banished oil from power generation.  How fitting if the third finished the job and began to free transport from oil’s century-long monopoly.

The Nelson plan is populist and silly in the long term.  Wasting valuable time on this issue in parliament is a criminal waste of time by both parties, while irresponsible economically and environmentally.

There is a difference between cushioning costs of productive activities and subsidizing fuel use that does not generate income.  It’s fairly certain that the population could understand this.  It’s fairly certain that short-term self-interest rather than the national interest is driving politicians in both the federal government and opposition.

For both parties, it’s a lost opportunity and a worrying precedent.


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