Discussing Energy Economics on the Internet

A Bold Move

Posted in California,Oil by Cheryl Morgan on the November 28th, 2008

Even in these environmentally-conscious times it takes a brave man to suggest that Californians should pay more for their gasoline, yet that is exactly what Severin Borenstein of UCEI Berkeley will do next week. He does, however, have a get-out clause: he wants the tax surcharge inversely indexed to the price of oil. Here’s the abstract of his paper:

California is faced with an unprecedented budget crisis. The state is also committed to significant reductions in greenhouse gases that cause climate change. Meanwhile, the price of gasoline is plunging as the world economic slowdown cuts oil demand. At the intersection of these three situations lies an opportunity. I analyze the effects of a transportation fuel surcharge that moves inversely to the price of oil. Such a surcharge could stabilize gasoline prices at levels that a few months ago would have been celebrated by consumers and still significantly reduce California’s budget deficit. It would also slow the return of gas-guzzling vehicles that will otherwise result if oil prices remain at current levels.

If you would like to see him make the point to the public, he will be at the Hyatt Regency Hotel, Regency F, 1209 L Street, Sacramento from 4:00pm to 5:30pm on Wednesday, December 3rd. Some of us, however, will be at or on our way to New Orleans.

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