Quote:
SoCal Alan said:
But the scenario that you propose is that all of a sudden, crude oil will disappear. That is not realistic and my main point of contention. Crude oil will become more and more expensive, but it's not an overnight, on-off switch, binary movement.
I'm afraid you got me wrong. My scenario has never been about oil vanishing overnight. It is all about energy becoming too expensive for Joe Public's daily commute.
This applies regardless of which fuel is used in the future. This works as follows: Right now, gasoline is the least expensive energy source for mobile vehicles. As oil prices rise, it gradually becomes profitable to exploit previously-unprofitable low-quality oil fields (e.g. Canadian tar sands). At one point, it becomes profitable to replace gasoline with ethanol, or hydrogen, whatever. This means that we will never run out of energy,
provided we are willing to pay the price for it. It does not mean that we will run out of energy, but it does not mean either that we will never run out of
actually usable energy. Finding new energy sources that are more expensive than current prices
basically ensures that prices will never go down. If they did go down, the new sources of energy would not be profitable, so supply would be reduced. Since every new energy source will be more expensive than the last one (otherwise it would have been used earlier), it is impossible to meet the unsatisfied demand for energy with cheaper sources. As a consequence, prices would rise again until the new sources of energy are profitable again.
This means that whatever new source of energy we might find, the days or cheap energy are gone forever. It does not matter whether the 2030 Carrera burns gasoline or hydrogen or rat whiskers. What matters is that it will cost $ 5 per mile. A 40 mile round-trip commute suddenly sounds expensive, doesn't it?
Quote:
SoCal Alan said:
But what does it mean to use 1/2 the crude oil that you use? If crude oil increases in price ten fold, you will get hurt just like we will get hurt as a result. Your governments have to show that the extra $3 per gallon is all being used to fund the R&D that you are suggesting will take a long time to mature. But you've been doing this for a long time, I assume. So what has your 100% tax rate got to show for?
It just makes the same amount of oil last longer. It also lowers the price that Americans pay. I can tell you that if we were wasting energy at American rates, oil would be over $ 150 a barrel already.
By the way, it's not a 100% tax rate. We have the VAT which is 10 to 20%, and the fuel tax, which is fixed but happpens to be around 80% at current prices. Since it is a mostly fixed tax, this means that we are proportionally less hit by price increases than Americans.
To answer your question, the money has been used to build a pan-European high speed train network that basically made short-range (up to 800 miles) air travel redundant. I think our fellow European members will also confirm that the highway system is excellent in France. Now, if only we could actually use it the way it was intended...
However, the most lasting legacy is that it motivates companies and individuals to be more efficient. But if European countries lowered energy taxes as you suggest, they'd have to raise other taxes to make up for the loss of income. Our tax rates are insane enough already!
But this was not my point. My point was not that American cities raise taxes
in order to raise money for subway and light rail systems. My point was that American cities have to raise taxes
in order to convince American citizens to stop wasting energy. But you're right, they are going to need all the money they can get to build those public transportation networks. Actually, it'd also help if citizens stopped voting down such projects. I lived in Cincinnati where they actually have an abandoned subway system, how ludicrous does it have to get?
Quote:
SoCal Alan said:
All major cities in the U.S. have mass transit (ie., light rail and bus systems) in place right now.
You can't seriously compare the city and intercity public transportation networks in Europe and in the US. Did you know that Stuttgart, a city of barely 500,000 and the birthplace of the automobile, had 22, count them
twenty-two light rail and subway lines? I know the subway network in NYC or Chicago works well. But how about Atlanta, Minneapolis, Las Vegas, Houston? Meanwhile, Amtrak is a joke, the Acela is slow when it's working at all, and citizens routinely vote down the kind of projected rail and subway links that you're mentioning.
Besides, citizens would have to wait for 10 years until the replacement solution is built. This might look like a minor detail to you, but it's a huge deal to the people adversely affected.
Quote:
SoCal Alan said:
On the other hand, one could make an argument that you are delaying the real development of alternative forms of energy. If the 100% taxes are not spent on transportation alone, you are not being as efficient with your transportation dollar as you could be. If you were not taxed so high, gas prices would be lower (obviously) in the short term but demand for crude would rise faster. The price per gallon would overall be lower than what you are paying for, in the net. But the crude oil in the world market would rise because of Eurpoe's increase in overall demand. The world (not just Europe) would now have to meet the demands of the public because of higher prices by now throwing more money into the R&D that the world needs.
You fail to account for the captation of the value created through innovation by the inventors: they will maximize their profit and price their invention so that the TCO of their product is 99% of the TCO of competing products which do not use this invention. As a consequence, the end user is only getting a minute benefit of switching. This means we'd pay about the same price as everyone else. Since the price of crude would be much higher, everyone loses. Not to mention the current reserves would last a few decades less.
This phenomenon is very well-known in innovation management. It is the reason why the price premium for hybrid cars is roughly equal to the amount of money saved by the owner over the lifetime of the vehicle. If tax advantages didn't kick in, motorists would have no financial reason to do the right thing.
However, there are long-term strategic reasons to do the right thing. When America starts getting serious about fuel efficiency, it will be forced to purchase from European or Japanese companies, because American companies have zero know-how, zero credibility in the energy-efficiency business.
Btw, congratulations again on your baby. I sure hope he'll live in a much better world than my gloomy forecasts...