I’m not sure, exactly, whether this news is promising or disappointing: the San Jose Mercury Newsreported last week that environmental advisers to Governor Schwarzenegger are calling for a new fee on gasoline that would help pay for incentives to reduce climate-warming emissions.

The good news here is that they’re considering fees on gasoline in the first place. 

The bad news is that the proposed fees are tiny—just 2.5 cents per gallon, which isn’t enough to affect consumption more than a nominal amount.

The good news is that the fees will go to a good cause: there are a lot of inexpensive ways to reduce emissions, so the fees, as small as they are, could do a lot of good—especially considering that California uses about 15 billion gallons of gasoline per year, so a 2.5 cent per gallon fee would raise $375 million per year. 


  • Of course, there’s also a curiosity here that’s worth noting.  The proposed gasoline fees are similar to the "public goods charge" already levied on electricity bills.  But it seems as though the outrage about new "taxes" is largely reserved for gasoline; fees on electricity get a pass.  Which suggests that gasoline holds a special place in the American psyche—we pay close attention to anything that can make gas prices go up, but let similar price increases in other parts of the economy slide by unnoticed. 

    One possible explanation for this is that we’re a car oriented culture, and that we’ve come to prize cheap, unlimited mobility.  I think that’s only partially true.  To me, it seems that we pay so much attention to the cost of gas because it’s the only commodity whose price is regularly and consistently advertised on busy streets. Day to day, most people get much more information about gas prices—which stations have cheap gas, what the recent price trends have been—than about anything else they buy.  The way that gas is advertised has made us super-attentive to its price. 
