CAFE Standards, Gas Taxes, and Winning the War on Terror

One of the rare times when I agree with Democrats (and in fact most of the political spectrum is united in this) is when they call for ending our dependence on foreign oil. Obviously the greatest flaw in our "war on terror" (a misnomer in my view: war on Islamo-fascism is better and too rarely used) is the fact that every time we go to the pump we fund our enemies. It is after all Saudi petrodollars that are flowing into the coffers of jihadist groups worldwide, where they are then spent to further their struggle against the US and the West. But the $64,000 question has always been what do we do about this?

Democrats have a rather wrong-headed approach to reducing our dependence on imported oil (remember, if it's not coming from the Middle East, it's likely coming from Venezuela, another unfriendly regime). The central plank of their new energy policy, passed 65-27 in the Senate this week, are increasing CAFE (Corporate Average Fuel Economy) standards and boosting ethanol production. as well as mandating that consumers be offered alternative-fuel cars. I have two big problems with this package and a host of smaller ones.

Obviously, I feel like this is too much government regulation of the auto industry - consumers demanding more fuel-efficient cars will deliver them too. I also feel that they're working towards the right thing (energy independence) for the wrong reasons (environmentalism) and through the wrong means (big government).

I also feel that their insistence on increasing ethanol production (sevenfold in the next fifteen or so years) is wrong-headed because it's done with an eye towards domestic lobbies, particularly in the Midwest. Yes, we have lots of corn. And yes, corn can be distilled into ethanol. But corn isn't the most efficient source of ethanol - however sugar is. So while it would make sense to produce sugar-based ethanol, that requires far more sugar than the domestic sugar industry could provide and would thus necessitate importing raw cane; it goes without saying that the domestic sugar lobby will not allow that (I hate agricultural special interests). In effect, everyone's embrace of corn-based ethanol is misguided and largely symbolic (it's a nasty side-effect of the Iowa caucuses being so prominent); some studies also suggest that producing ethanol from corn (because it's so inefficient) actually releases more greenhouse gases than are saved with the alternative fuel - which if you're wrapping yourself in the mantle of environmentalism when you call for these measures is rather self-defeating!

CAFE standards are also ineffective and misguided, as was pointed out in Opinion Journal last month. More efficient cars may actually cause consumers to drive more, thus negating much of the intended savings of both imported gasoline and exhaust emissions. It's also suggested that the smaller cars that CAFE produces are less safe and result in at least 3,200 more deaths a year. And increased CAFE standards won't save Detroit: just making them competitive with Asian imports in terms of economy don't solve the long-term issue of healthcare and pension costs, the real killers of the Big 3.

All of this isn't to say that there are no solutions: there are, but they require political courage and entail something more than symbolic efforts and slaps at the auto industry. I am of course talking about a gas tax. Mort Kondracke had a great piece in yesterday's Roll Call, laying out all of the benefits while acknowledging the unlikelihood of any politician having the gumption to call for such a tax. We pay nothing for our gas compared to the rest of the world, and its low cost is one of the reasons we're such a vast consumer. But putting those very consumers on the hot seat would instantly produce the kind of pressure on the automakers that Washington's looking for. Currently, the US average for gas taxes (state and federal) is $.42 a gallon. Aka nothing. In 2003, the country used some 360 million gallons of gas; even a dollar per gallon tax would be a significant source of revenue, despite the necessary rebates to low-income drivers and likely the trucking industry (who would otherwise just pass the costs on to consumers). This revenue could be used for research as Kondracke suggests, though I'm fundamentally opposed to the idea of government doing so because it'll be inefficient or paying down the deficit or any number of other useful things. Perhaps we could recognize that we need to stop buying foreign oil because those who sell it want us dead and instead funnel the revenues to the military, paying for better benefits for veterans or the like. Long-term, it will bring down our consumption of gasoline and the market will generate a demand for cheaper fuel sources and more efficient cars. All that's needed is some spine in Washington.

UPDATE: Check out Glenn Reynolds' take on the issue.