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    What Should the Price of Gasoline Be to Cover the Real Costs? PDF Print E-mail
    Contributed by Jim Elliott   
    Sunday, 08 June 2008
        Based on a study by the International Center for Technology Assessment, the cost of gasoline is nearly $3.17 per liter.  If this were added to our current price of $1.34, we should be paying $4.51.
        We have been externalizing the costs for years.  When do we stop and bring them back into the price and make it real?      Today there are a lot of expenses that we do not bring into the cost of our gasoline.  How much money is being spent to fix roads to allow us to drive around?  How much space, agricultural land and cost are taken up to store our cars in garages, park our cars, move the cars around effectively, repair our cars, insure our cars, pay for accidents, pay for police to stop accidents, look after people injured from accidents.  Think that 95% of the gasoline used in the car is to just move the car to the next location (maybe its down to 90% with some more efficient cars).  And then there are the costs that we typically don't think about when we pull up at the pump to fill the automobile.
        There are tax subsidies for the oil and gas industry to just go and pump it out of the ground.  I know in the times of Dome Petroleum, they got 133% tax brakes for exploration expenses for new reserves.  There are protection costs involved in oil shipment and motor vehicle sales.  Think the armies that are now required to protect oil wells and oil-rich regions of the world.  There are also the environmental, health and social costs of gas usage.  Think volatile organic compounds (VOCs), sulfur dioxides, nitrous dioxide and carbon monoxide.  Think of the $1000s of dollars being spent this winter and spring to clean up an oil spill in Wascana Lake from an asphalt plant.
        With the recent increased use of ethanol and biodiesel in vehicles and the increased costs to purchase food grains, when is it time to limit the use of grain feed to feeding people only, not cars?
        When is it too costly to have these around?  London is banning or charging extra fees to have cars in the  downtown area.  Like incandescent light bulbs, when are we going to start limiting the number of cars on the road?  Maybe we should just phase them out entirely?

    Comments
    Externalities as the Economists Say ...
    Written by shagya on 2008-06-12 00:38:35
    The "extended" costs associated with the automobile industry could be debated endlessly. The fact is that automobiles are a requirement especially in areas of the world like ours with extreme climates. The current obsession with this "necessity" could be ameliorated if the constant pressure to replace vehicles were eased. Years ago the car makers used a variety of crude scams to force people to keep buying new cars, superficial changes in appearance combined with poor construction techniques were a common feature of "Detroit dinosaurs" of the nineteen fifties and sixties. Thanks in part to public pressure, campaigns by activists like Ralph Nader and competition from overseas manufacturers some of these problems of "planned obsolescence" are no longer as crudely obvious as they once were. Today the federal government is starting a program to pressure citizens to trade in their "ancient" (pre-1995) cars for newer ones ... apparently some sort of cash incentives ... an idea obviously supported by an increasingly desperate industry. To me it is obvious this type of "green obsolescence" is an much a trick as the old "planned obsolescence" of the mid twentieth century. In the eighties some environmentalists were insisting even that all antique cars be either destroyed or made inoperable an idea which I'm glad didn't really take off. Encouraging waste is a greater problem, in my view, then whether your new DorkMobile model 2 has 15 airbags and goes another 10 kilometres on a tank of gas then Dorkmobile model 1. Surely we could encourage people to hang on to vehicles for longer periods if these machines were made as simply as possible for ease of repair and manufactured of the best materials. Also trying to sell truck based vehicles to ordinary joes or weird and odd shaped machines simply for their novelty demonstrates that "free" choice is largely a myth.

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