If a major oil and natural gas producing country decides to cut down on its fossil fuel consumption in the name of climate change, there are at least two ways of doing it. One way is by choking off the supply. Done that way makes fossil fuel and the products made from oil and natural gas less available and more costly. A better way to achieve the same objective would be to increase the taxes on gasoline and other fossil fuels. Not convinced?
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According to the U.S. Department of Energy, over 6,000 products commonly used in the United States are made from petrochemicals extracted from oil and natural gas. See:
For this and other reasons, choking off the U.S. oil and natural gas supply has clearly had a highly adverse impact on not only the U.S. economy but also our strategic position in the world. With the impending shortage of the diesel fuel used by freight trains and almost all large trucks, things could soon get a lot worse.
Thanks to an ever-active oil lobby, raising the taxes on fossil fuel consumption tends to be regarded with abject horror by subservient U.S. politicians. However, as shown in the chart below, most other advanced countries see things differently.
Here are six reasons why higher fossil fuel taxes would be a more effective way of combating global climate change than by reducing the U.S. production of oil and natural gas:
First, higher taxes would reduce demand without creating disruptive fuel shortages.
Second, it would revive American’s currently crippled oil and gas industries, thereby putting tens of thousands of furloughed oil and natural gas workers back to work.
Third, new taxes on fossil fuels would raise funds that could be used to significantly improve the more fuel-efficient forms of transportation.
Fourth it would keep the money in this country rather than sending it overseas to oil producing countries hostile to the U.S.
Fifth, it would end the humiliating nightmare of having to beg countries hostile to the U.S. to produce more of their inferior grades of fossil fuel.
Sixth, by both increasing the supply of oil and natural gas and taking steps to ease the demand for fossil fuels would combine to make it harder for the oil oligarchs to further enrich themselves at everyone else’s expense.
It’s time the U.S. got smart and joined other advanced and advancing countries in combating climate change through higher taxes on fossil fuels rather than upending the entire U.S. economy with artificially contrived shortages.