On Tuesday, Joe Biden announced a US ban on importing Russian oil. In making the announcement, he asked the American people to do something that reelection-obsessed politicians don’t often ask them to do: make a personal sacrifice now for the greater good of the future – and of humanity. .
“Today’s decision is not without a cost to your home – Putin’s war is already hurting American families at the gas pump,” Biden said. “If we don’t respond to Putin’s assault on global peace and stability today, the cost to freedom and to the American people will be even greater tomorrow.”
This is how we should all think about energy policy. Because yes, since Tuesday, Americans have been paying a near-record average of $4.173 per gallon at the pump. But in a fair world, with good leadership and fair climate policy, we would pay a lot, way more for that.
Indeed, the high prices facing American consumers are not indicative of a troubling future, but rather an invitation for Americans to join the reality of the present, where many Europeans countries pay three times as much for gasand experts suggest prices would need to rise further to encourage a transition away from fossil fuels.
A combination of short-term factors have sent gasoline prices skyrocketing in the United States, from a collapse in consumer demand and production capacity during the pandemic, to OPEC limiting oil flows, to international isolation of Russia, the second biggest crude oil exporter. But even though some Americans in states like California are paying $6 a gallon, that price still pales in comparison to an accurate accounting of the impact of fossil fuels on the planet.
As Ian Parry, environmental policy expert at the International Monetary Fund, told NPR in October“Fossil fuel prices should reflect not only the costs of producing these fuels, but also the environmental costs – the carbon emissions that contribute to global climate change and the emissions, which cause local air pollution, that increase the risks of heart disease and stroke and lung disease for people exposed to this air pollution.
Research of his team found that gasoline underpricing is “pervasive” relative to its true environmental and health costs. The nearly $6 trillion in subsidies the fossil fuel industry received in 2020 was a major factor in this disconnect. We pay for all damage caused by fossil fuels, even if they are cheap at the gas station.
A truly efficient gas price could help cut global CO2 levels by more than a third, keep the planet under 1.5 degrees of warming, boost revenues equivalent to 3.8% of global GDP, and nearly stop one billion deaths from air pollution per year, according to the IMF. . Such a strategy would probably be double or even triple the price of gasoline.
Right now, US gas pricing policy remains muddled at best. In 2021, the Biden administration joined 19 other countries commit to ending fossil fuel subsidies abroad. A year later, the White House and top Democrats are reflecting gas tax suspension for the rest of the year. At some point we have to choose between cheap fuel and a habitable planet.
Of course, even if policy makers recognize that transport is the leading cause of greenhouse gas emissions in the United States and decided to make prices reflect this, any petrol policy should be designed to prevent the poor from bearing the brunt of the cost. They are already facing the worst impacts of the climate crisis, despite contributing the least to greenhouse gas emissions. They shouldn’t be paying for the climate myopia of the rich at the pump on top of all that.
A reality-based gasoline price, likely achieved through higher taxes on consumers or producers, could fund individual tax benefits for the poor. Or it could fund society-wide improvements, like green infrastructure and public transit, that would level the playing field, like Harvard’s Jeffrey Frankel argued.
U.S. Federal Gasoline Taxes have not increased since 1993. They no longer generate enough money to even maintain US infrastructure – their original goal – and other nations often pay close to four times more gasoline taxes.
Only skillful and passionate leadership can convince most people to pay more for gasoline so that we all pay less for the impact of fossil fuels. Ukraine is again instructive here. Gas prices are politically and economically volatile and often follow closely with presidential approval ratings. But the Ukrainian crisis shows that some issues transcend politics and even economics.
A the wall street journal poll on Tuesday found 79 percent of Americans in favor of banning Russian oil, even if it raises the price of gas. If people saw the moral urgency and human devastation of climate change the same way they saw it in Ukraine, perhaps majorities would support moving away from fossil fuels.
Until then, Americans will be paying bargain prices at the gas pump for their own destruction down the line.