The Oil Drum: Europe

I prefer a direct handout. Much simpler. Tax all fossil fuel production/importation at a high level, and give out the tax to taxpayers as a standardized refundable tax credit. Yes, it's revenue and cost neutral - that's the prerequisite to get the ball rolling. It's also a significantly progressive tax if you consider that the rich use more energy. But it's the only way that people are going to be MOTIVATED to use less energy. We can either wait for this decision to be made for us (supply/demand or geopolitical panic to raise the price for us, and oil companies to get richer than most countries), or we can do it ourselves in preparation, and do it perdictably, slowly, steadily. With a required handout of all revenue at the end of the year back to taxpayers.

The way it works is thusly: The fact that it's revenue neutral doesn't mean it can't affect behavior. It just means that the average person doesn't see it as so much of an attack on their lifestyle. It presents them with a choice - do you want to have the newfound ability to put your kids through college, go to a fancy restaurant, build that new addition, buy a house, etc, or do you want to stay away from the filthy Bus People(and all those other choices) by using a car for all transportation? That's the decision-making process that's affected. People are handed money, and presented with a selection of choices - the fossil fuel using choice is simply priced with a bit more of its externalities(roads, police, planning, global warming, energy wars) included. People are forced to look at whether perhaps moving closer to town, insulating their house, chucking the Suburban, or installing solar panels might be a good idea. People are motivated to save money for themselves - and we give them the money to do it. Such a tax is the only acceptable way I've seen of creating a system of rational actors who are inherently lower energy in their thinking, and who aren't angry/resentful/sad about this fact.

We spend a significant amount in order that people can continue gasoline-based personal transport compared to what people actually spend on gasoline. This would merely present people with the realities of that decision on a personal level. 4 day road trip versus 7 days on a cruise ship... which is it gonna be? Right now, one of them uses more fuel per capita, and costs much less.

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You're arguing that we can't increase energy prices artificially because old people will be confused and refuse to heat their houses? I believe that the phrase I'm looking for is the skin condition on the tail wagging the entire dog. It's a bit ridiculous to base the world's energy and environmental policies on the actions of people who are mentally unfit to care for themselves.

Home heating can be vastly reduced through additional insulation - which taxing those who continue to use outdoor patio heaters can pay for.