Better boost your operating budgets. Motor fuel costs will skyrocket if Congress decides to reduce U.S. oil imports and greenhouse gas (GHG) emissions.
That’s the bottom line offered up by a team of Harvard University bright lights at the University’s Belfer Center for Science and International Affairs. The group says to expect gasoline to top $7 a gallon.
The team concludes that the only way to change the status quo in America — to reduce GHGs 17% by 2020 — is to adopt a mix of stringent rules that substantially increase fuel costs and increase vehicle mileage. To do this, the Harvard study suggests starting with a $0.50 a gallon tax in year one and adding another half-buck tax a year until the tax reaches $3.36 per gallon in 2020.
The Harvard team assumes CAFE standards will boost average mileage standards to 43.7 mpg, but most of these efficiency gains will be offset by an increase in vehicle miles traveled as Americans prosper, buy more cars and live with ever longer commutes.
Plus, electricity costs will also be on the rise because any comprehensive plan to create an energy policy that reduces oil imports and GHGs will require a carbon tax of up to $60 a ton of carbon dioxide released by power plants and industrial facilities.
The team locks in on driving up transportation costs as the primary way to achieve the interlocked goals of reducing American dependence on imported oil and reducing GHGs emissions.
Reason: 70% of oil used in the U.S. is for transportation. Therefore, just cutting GHG releases from power plants and large industrial facilities won’t get the job done.