Ezra points to a little chart showing that 88% of Americans name an automobile as a necessity (down 3% from 2006!), and writes:
One of the quirks of the elite political debate is that it tends to occur in dense cities with extremely impressive transportation infrastructures. DC. New York. Places where cars are more of a luxury item. But that, as the graph shows, is not how most Americans think of them. Car stereos are a luxury. Cars are a necessity. They’re ranked as more important than a phone, a computer, or an air conditioning system. That’s not to say that the attachment between suburbanites and their Camrys is forgotten in the political conversation, but it doesn’t, in my experience, inform the conversation as viscerally as some might expect. I fear that an Orange County commuter is car-dependent in a way a New Yorker has trouble fathoming, and thus correcting for, when they’re thinking about how to sell a bill. The theory right now is that some sort of rebate system could actually make cap and trade an economic boon to the working class, if not the commuter. But loss aversion being what it is, I find it hard to imagine that the promise of a tax rebate they’ve never gotten before will overwhelm fears that they’ll pay more money at the gas station they visit every week. One just seems more tangible than the other.
The problem with this is that any politically tolerable carbon price, enacted by cap-and-trade or tax, would add mere cents to the price of a gallon of gas. I don’t remember the exact data point, but I recall George Bush railing against Lieberman-Warner by saying that it would add 40 cents to the price of gasoline by the year 2020 (or something like that). At a time when prices were rising by well over a dollar in a matter of months, this was not a particularly frightening statement.
But people hate the idea of expensive gas, and it could be the case that even a small potential increase in prices would make it more difficult to pass a carbon price. For this reason, some greens (Dave Roberts, for instance) argue that a carbon pricing system should exempt transportation. I disagree — the idea of pricing is that emission reductions will occur in difficult to predict places, which makes me extremely reluctant to exempt such a large sector of the economy — but I understand where he’s coming from.
But the most important thing to understand about the above is that consumers are far more vulnerable to market-driven swings in the price of gasoline than they are to regulation-driven changes. Any potential government-engineered gas price increase pales in comparison to the spike markets delivered in 2007 and 2008. Given the macroeconomic fallout from that spike, we should look at overwhelming autodependency not in terms of the threat it poses to environmental legislation, but in terms of the danger it represents for economic stability and consumer welfare. Whatever happens to carbon legislation, there’s a strong case to be made that other policies should be adopted to reduce American dependency on oil. You all know my preferred options — an increased gas tax, a move toward congestion pricing, new investments in rail and transit, and adjustment to incentives that encourage autocentric development patterns.
And of course, a nice side effect of a reduction in oil-dependence would be the elimination of a potential barrier to more aggressive reductions in emissions.
Update: Link fixed.