The Oil Drum: Europe

whether governments will squander the revenue.

The excise duty should be calculated and used to pay for:
(1) removing CO2 from the atmosphere
(2) repairing all other environmental damages
(3) cover all health costs
(4) maintaining roads, traffic lights etc.
(5) research and development of clean(er) fuels
(6) building up public transport for the post peak oil era

Anyone with numbers? What have I forgotten?

2) why fuel saved in the UK won't be used in China and India

That is a GW/resource issue. The immediate UK problem is that the country is getting poorer. It is important to reduce our imports by discouraging oil use in the UK.

Ingenious rationing sounds good if you have a good scheme.

We seriously need to hypertax vehicles that consume even slightly worse MPG than a chosen value ie vehicles that have more power and weight than they need to have. They threaten to do this through road tax every year but they dont have the balls to really make it hurt. This is not just for socialist conspiracy reasons. The reason is found in the engineering phrase 'impedance matching'. If you have car A and car B, where A is 2 x the size, power etc, unfortunately, it doesn't consume twice the fuel of B when used identically because the load does not double. Yes it carries twice the weight up hills - then it rolls down. And most of the time its rolling flat. A tax on fuel actually penalises the low power engine more AS A PERCENTAGE OF ITS AVAILABLE POWER.

"1) why it has to worsen the natural wholesale price rise"

To make consuption go down.

"3) whether governments will squander the revenue."

Well, I can't garantee that. It is up to the UK citizens to keep their government honest and minimaly efficient. But even if the governemnt does sqander the revenue, its main objective, that is reducing consuption is achieved.

Now, the best one:

"2) why fuel saved in the UK won't be used in China and India"

That is China and India problem. Because of the taxes, UK will be less dependent on oil while prices rise and will spend less money importing it. If China and India choose to stay unprepared and send their money away buying something with decreasing supply, too bad for them.