Monday, October 24, 2005

Terrorism and Global Warming: Crisis Issues?

Today the New York Times published a pro-gas tax editorial. I agree with almost all of its substance except I’m confused by its first sentence. “There's no serious disagreement that two major crises of our time are terrorism and global warming.” Is there a crisis with respect to either of these issues? Both pose risks to our day to day life but does this equal a crisis?

I could see that policy activists would like people to believe that these are “crisis issues” because this would increase the likelihood that innovative policies will be adopted as the public clamors for Congress to “do something”. I’m not sure why the Times engages in this overheated rhetoric. Do their editors really get so breathless as they think about day to day life? Or do they think that their enthusiastic cheerleading will make some Scarsdale Mom write a letter to her Representative?

There are costs and benefits of fighting terrorism using our scarce resources. There are costs and benefits of mitigating greenhouse gas production using our scarce resources. Ideally, these decisions could be approached in Spock from Star Trek logical way rather than turning to Dr. McCoy.

Gas Taxes: Lesser Evil, Greater Good
October 24, 2005
Editorial

“There's no serious disagreement that two major crises of our time are terrorism and global warming. Now, however, the energy risks so apparent in the aftermath of Hurricane Katrina have created both the urgency and the political opportunity for the nation's leaders to respond appropriately. The government must capitalize on the end of the era of perpetually cheap gas, and it must do so in a way that makes America less vulnerable to all manner of threats - terrorist, environmental and economic.
The best solution is to increase the federal gasoline tax, in order to keep the price of gas near its post-Katrina highs of $3-plus a gallon. That would put a dent in gas-guzzling behavior, as has already been seen in the dramatic drop in the sale of sport-utility vehicles. And it would help cure oil dependency in the long run, as automakers and other manufacturers responded to consumer demand for fuel-efficient products.”

The Editorial was also weak with respect to the efficiency costs of gas taxes. Do high gas prices cause recessions? Or was this past historical relationship a statistical artifact?

2 comments :

al fin said...

Long term, petroleum costs are trending upward. In true market form, the upward trend is chaotic rather than smooth. If the government were to institute new petrol taxes at periodic intervals, announced long in advance, the trend might smooth itself out and allow better advanced planning. In other words, since petroleum is going up anyway, why not make the trend more predictable for the players? Speculators might suffer from the predictability, but most industry planners would appreciate it.

Anonymous said...

ever consider there is an environmental upisde to terrorism?

when there is a terrorist attck, there is economic uncertanity which causes less consumption, less consumption means less production, less production means less useage of raw material (oil, wood, mining, etc).

Is global terrorism
ultimately good for the global environment?