Gas Prices Could Rise to $5 Per Gallon

[JCL]

I understand the difficulties in raising taxes on fuel, and if it ended up in a general government revenue fund it would only potentially impact demand, while not doing anything to accelerate the development of alternatives.

But it doesn't have to be a net tax increase, if government can cut other programs to fund investment in new technologies.

Three years ago our provincial government implemented a carbon tax. It was revenue neutral, in that average consumers and earners came out identically, and there were additional tax benefits worked in to it to help very low income families. For those that doubted government, there was legislation that required the government to show how all the tax collected was returned to taxpayers in other ways, each year. There were also inevitably some winners and losers. If you had very inefficient home heating, and consumed more gas than the average household, you lost (until you invested in more insulation or a better furnace, if that was possible). If you had the ability to change your behaviour, or were low consumers of fossil fuels, you could win. We won, as we chose to move closer to work, downsize our rather empty large house, buy more fuel efficient cars, and so on. We wanted to do some of those things anyway, it wasn't all because of the tax, but we came out ahead personally. Across the larger population though, whether directly or indirectly, what the new tax did was to start (slowly) to shift the tax burden so that it was more directly linked to excessive consumption of fossil fuels, whether for transportation, heating, or industry. It was intended to change behaviours. I found it interesting how much support the tax received from the general population. I think it is one example of how government can, as X5rolls put it, provide a framework to support the desired end result, in this case for both consumers and industry.

I agree that electric vehicles will not have an immediate benefit in locations where power is primarily produced by coal or natural gas (we have a lot of hydro power here). I think that anticipating a potential shift to electric vehicles means that attention should be paid to cleaning up power stations, and not just tailpipes.