Gasoline is very heavily taxed in Europe. The effect of the recent increases in oil prices have not been as dramatic in Europe as they have been in the U.S. The best thing that could happen to stimulate the long-term development of alternative fuels would be to have the price of oil stabilize at $40 per barrel or higher.
Of course we could always slap some heavy federal taxes on gasoline, though that would be regressive.
ems.org
EARTH TALK
From the Editors of E/The Environmental Magazine
Dear EarthTalk:
Why is gasoline so much more expensive in Europe than in the U.S.? —Bo White, Chicago, IL
There are multiple components to gasoline prices, according to the Energy Information Administration, an independent statistical agency within the U.S. Department of Energy: the cost of production and delivery, including the cost of crude oil to refiners and refinery processing costs; marketing and distribution costs; retail station costs; and taxes.
In 2002, crude oil accounted for about 43 percent of the cost of a gallon of regular grade gasoline; refining costs and profits comprised about 13 percent; distribution, marketing and retail dealer costs and profits made up 13 percent; and federal, state, and local taxes accounted for approximately 31 percent of the cost.
Gasoline prices in countries such as the United Kingdom and Norway can sometimes reach $5 per gallon—because of high taxes. According to the Wall Street Journal, taxes in the United Kingdom account for 80 percent of the pump price, while the Europe-wide average is between 60 and 70 percent.
In Germany, gasoline taxes account for a whopping 20 percent of all government revenues. Across Europe, such taxes have resulted in more fuel-efficient vehicles. According to John DeCicco, a policy analyst at Environmental Defense and author of Automakers' Corporate Carbon Burdens: Reframing Public Policy on Automobiles, Oil and Climate, "The higher taxes have contributed to fuel efficiency that averages 30 percent higher [than U.S. levels]. However, they have not motivated ongoing conservation."
If gasoline taxes in the U.S. had the same effect on driving that cigarette taxes have had on some smokers, higher gas prices could provide the motivation for some consumers to switch from, say, large SUVs to smaller more fuel-efficient cars. According to a study published in the American Journal of Public Health, every 10 percent increase in the price of cigarettes reduces smoking among pregnant women by seven percent. The average American driver is certainly not as motivated to "do the right thing" as a mother-to-be, but it stands to reason that, like the effect of cigarette taxes, increased gas taxes might drive motorists to drive more fuel-efficient cars—and those tax revenues could be used to further promote fuel-efficiency and develop alterative fuels.
CONTACT: Energy Information Administration, 1000 Independence Avenue SW, Washington, DC 20585, (202) 586.8800, www.eia.doe.gov; Environmental Defense, 257 Park Avenue South, New York, NY 10010, (212) 505-2100, www.edf.org. |
