Transcript of radio commentary that aired in January 2004 on KUNM public radio 89.9 fm in Albuquerque. Link to audio at end of page.

By Arjun Makhijani

If cheap oil is at the center of the world’s security and environmental woes, what can we do about it? One simple answer, given by many, is to simply tax oil. European cars are more efficient than U.S. ones in large measure because of the stiff gasoline taxes in Europe. But this cannot be the center of the solution, in my opinion.

Taxation of oil is regressive. To have an impact on climate change, taxes will have to rise to punishing levels, and globally. This is unfair, unreasonable, and impractical, in part because so many have so little access to the services that oil provides. Further, the technology to vastly improve automobile efficiency is being kept off the market, maybe by consumer decisions, maybe by automobile companies, maybe both. There’s a vast gap between the available technology and the marketplace.

Audi, for instance, has made a commercial car that gets 80 miles to the gallon. It does not even involve hybrid engine technology. It’s an advanced diesel. Volkswagen has made a car, very costly and not a practical passenger car at present, but it gets a whopping 265 miles per gallon. We need stringent efficiency standards for cars that will rise rapidly and inexorably, along with safety standards. Oil consumption can go down substantially, even with more travel.

It may also be reasonable to heavily tax inefficient cars, and unsafe cars, to discourage their manufacture and to use the taxes to promote renewable energy systems. Efforts to greatly increase transportation efficiency can be coupled with increased use of natural gas. Natural gas emits less carbon dioxide than oil or coal; it’s compatible with fuel cells, which I believe should be in the center of much of the world’s energy system in the future. That’s because fuel cells can use hydrogen from renewable energy sources, like wind energy and solar energy. There’s a good deal of natural gas in the world; it’s better distributed than cheap oil. And it can provide a relatively smooth transition to a different energy world.

The solutions to the problems of climate change and security that have become enmeshed in oil and transportation are going to be y very difficult to accomplish. Let’s focus on the real problems and the prospects for solving them. Obsessing about catastrophe because we will soon reach the peak of oil production or run out of cheap oil is diversionary at best. At worst it simply fuels the demand for more oil production or more nuclear energy production.

For more on energy, oil, and climate change, see the website of the Institute for Energy and Environmental Research, This is Arjun Makhijani.

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