Posts
Gas prices are in red and total taxes* (both excise and consumption levies) are in blue. As you can see, almost every European country surveyed charges more in fuel taxes alone than we pay for a gallon of gasoline.I posted about gas prices last week, but this article really intrigued me. Check it out and give some of your thoughts. Notice how much in tax the European's charge compared to us.
The World in Gas Prices
The high gasoline taxes in Europe are an incentive for people to take public transit and invest in more eco-friendly methods of transportation, like high speed rail. I dont necessarily want higher gas prices, but increasing taxes now may make the short run expensive but the long run sustainable.
ReplyDeleteWow nice graph, Jared "VIP" Cohen! I did my SIP on taxing internalities, a nuanced version of externalities. It bothers me that the rest of the western world is so much more forward-looking than the US. I know at K we have a lot of people with concern for the environment and there is a lot of progressive "green" mindsets, but that is in our K bubble. Outside of K, are extremely wasteful. Laura mentioned the public transit and rail in Europe. While I think that system works really well in Europe, the US layout is not conducive to the same system. The country is huge, and the cities and towns are spread out all over. Even within the large "cities" the area is so big - we have suburbs. Think of Detroit, and the outlying suburbs...it's so much different in Europe, where everything is very concentrated.
ReplyDeleteI think that increasing the gas prices would definitely alter the types of cars we drive, force us to drive less, carpool, and figure out a more efficient way to transport products, which is where I think a rail system could be very efficient - no more semis!
Either way, doubt it's going to happen.
Dane, I think you're spot on with the layout of our country causing rail systems to not be an efficient means of public transportation. Yes, they work great in Europe but the US has a totally different landscape. I think rail systems would be a complete waste of money that we don't even have... (plus we have many other problems in our current infrastructure that I believe we should focus our efforts/money there). I also think that when gas prices reach a certain point (I don't think the price is high enough yet) people will be forced to change the ways in which we drive. Unfortunately there are currently so many 'gas hogs' that we as a nation simply can NOT avoid using them in the short run. I also think Dane brings up an interesting point about using rail to ship our products.. however I think shipping all that weight via rail would cost way more than it currently does via semis. Any thoughts?? Also, there are so many companies that are currently designed specifically for the use of semis. That is, warehouses today are not only located right near major interstate highways, but they are designed for semis to literally drive through an essembly line that allows them to load/unload extremely fast. On top of that semis can virtually go anywhere, whereas trains can obviously only go where there are tracks... I guess my arguement is that we've already invested so much money into accomodating semis that it would be a waste to throw it down the drain now because of gas prices...we knew that gas prices would continue to rise
ReplyDeleteThe amount of gasoline consumed by Americans per day is shockingly high compared to the rest of the world:
ReplyDeletehttp://www.paulspoerry.com/2007/07/12/gas-consumption-per-day-us-vs-rest-of-the-world/
Because the majority of the US lacks a decent public transportation system, the majority of citizens are unable to get around without a car. It is much easier to get around using public transportation in Europe, which gives them an alternative to paying the extremely high prices for gasoline. I agree with both Matt and Dane; the layout of our country makes public transportation and the rail system rather inefficient. While some cities, such as New York and San Francisco, were able to create a subway system, the majority of US cities have nothing like that to connect the outer suburbs to their closest large city (because they were not created at the turn of the century). The Detroit people mover, also known as the mugger-mover, is the closest thing Detroit has, and it's a complete joke. For those who commute from the suburbs into the city, driving is their only option. Therefore we are forced into paying whatever prices we're given.
Matt brings up some solid points about the semi/rail shipment comparison. He notes the investment by companies in semi usage. And, I agree, it would be a short-run economic cost to switch to rail. But, I think maybe Matt overlooks the total societal cost. Semi's use a ton of gas. The rail, because it is essentially shipments version of carpooling, would be able to transport far more amounts using far less energy than the thousands, dare I say millions (joke, kind of...), of semis on the roads, which only carry small amounts of specific products. By switching to rail for shipment, society as a whole - not just the companies who use semis - would be far better off because of the benefits to the environment.
ReplyDeleteMatt also briefly mentioned another point that is a little more difficult to challenge. Semis are able to drive right to the places that they deliver, surely trains would not have that luxury. But, I don't think that's a huge problem either in. This is where semis would still be useful. The trains would carry the products to a general location, and semis would be able to come pick up the goods a short distance from the closest drop off station, and they could "drive through an essembly line that allows them to load/unload extremely fast" (I only cite Matt's comment because I have no idea how semis work). The companies would save money in the long-run, without a doubt.
The question becomes, however: who is going to construct these railroads? I think it has to be the government, otherwise, by the nature of the rail industry, there would be too much monopoly power. But, there is no way that tax payers would support this, surely not with our current budget deficit. So maybe a private system with tons of regulation...say, no one company can control 1% of the market?
Tricky question...
Nice find Becky I was going to post something very similar to that link. One reason I think U.S gas prices are so much lower than other countries (or the main reason) is because we do consume so much more oil. The U.S has a considerable amount of power and influence over these prices, which has led to lower pump prices for us. Additionally, all oil barrel prices are bought and sold in the U.S dollar denomination. Just something you might want to think about when you consider the price of a liter or gallon in another country.
ReplyDeleteWhile in quantitative form this makes it look like the U.S. doesn't have it so bad, the reality is that Americans don't have access to quality public transit systems, forcing us to drive from A to B and use gasoline a lot more than Europeans. Supply and demand.
ReplyDeleteThe reason that Detroit and other major cities like Atlanta do not have public rail systems is because cars became popular and the car companies, like Ford and GM bought the streetcar tracks and ripped them out, making the people have to buy cars as well as making the roads for cars only and so people wouldn't have to compete with the trolley system for space. Check out this discussion forum to see Detroit's streetcar lines and learn more about history of them. The folks at Detroit Yes forums know a lot about railroads and streetcars. They have many discussions that pertain to these topic. Apparently not only did we have streetcar tracks connecting the whole city we also had inter-urbans which connected Detroit to Ann Arbor, Flint, Toledo as well. These lines also were connected to each other at certain hubs. The Michigan Central Station In Downtown Detroit was the main railroad station which had many of the streetcar tracks running to it. There also were freight rail lines running throughout the city in which the train would stop and the cars would be unloaded right outside of the factories. We do ship a lot of automobiles by rail still today. They stack them 4 deep.
ReplyDeletehttp://www.detroityes.com/mb/showthread.php?5858-Detroit-Street-Railways-Map
Oh and this was a recent news item:
ReplyDeleteWe just received a second lot of money towards developing the Kzoo to Dearborn section of tracks to make it "high speed" for the Detroit to Chicago rail route. Apparently it already has been high speed once you get past Kzoo. Niles, Michigan which is the next stop Westward to Chicago has been cleared for high speed which is only 110mph which is actually not that fast when compared to European rail or Japanese trains.
I am for this improvement. I just discovered the train this year and I love it. You can hang out and do your homework and it is very relaxing not have to worry about driving. It also is packed on weekends and I do see a lot of people using rail who are business people.
And a train ticket is only 35$ usually, sometimes it is cheaper if you can get the AAA discount or you have a student rail pass which you have to pay for... but a round trip (home and back) for spring break was much cheaper than having to pay for the gas tank to get out here to Kzoo.
http://www.mlive.com/news/kalamazoo/index.ssf/2011/05/200_million_amtrak_upgrade_wil.html
I can see where Dane is coming from in his comments but I am going to have to agree with Matt. General Motors had a huge stake in the growth of our country. As our country grew to be the superpower it is we rapidly industrialized and created infrastructure that was vital to our economy. As our country was growing in the 1950s so was the highway system. It was a way for our country to be better mobilized. It reduced travel times relative to city or town streets, and increased opportunities for people to travel for business, trade or pleasure and also provide trade routes for goods. Modern highways reduce commute and other travel time but additional road capacity can also create new induced traffic demand. There were negative externalities however as the highway system left the urban core densely populated with lower income families as urban sprawl took place. I agree that taxation would lead to us being less dependent on gas but I also think that this would have a larger economic impact on several different industries (besides shipping).
ReplyDelete