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The Benefits of $4 Gas

There is a great article today in Time. It covers a lot of ‘hot button’ issues with me, such as suburban sprawl, shorter work weeks, and conservation:

10 Things You Can Like About $4 Gas

Gas prices are near $4 per gal., as no one needs to tell you, and they are likely to stay that way. Most of us still don’t have the alternatives we need to adapt with grace, which means that many will adapt just by suffering. We will run out of gas on I-80, ease our minivans over to the shoulder and tell the kids everything is O.K. We’ll fall behind on Visa bills to pay for gas so we can buy food made ever more expensive by energy costs.

But it’s also true that Americans are finding options where there seemed to be none. They’re ready to change — and waiting for their infrastructure to catch up. They are driving to commuter-rail lines only to find there are no parking spots left. They are running fewer errands and dumping their SUVs. Public-transit use is at a 50-year high. Gas purchases are down 2% to 3%. And all those changes bring secondary, hard-earned benefits.

“You suddenly are reminded how the economy works,” says Eric Roston, author of a new book about energy, The Carbon Age. “Nobody wants high prices for oil. But there’s also no faster mechanism to change behavior.” The suffering will go on. But the story, like any good tragedy, is not without redemption.

This is EXACTLY why I have long advocated higher carbon taxes. The suffering in that case could have at least been managed. In fact, had we instituted carbon taxes and used the money to incentivize fuel efficient vehicles and public transport, people would have not only had the expectation of higher prices, but also the means with which to adjust. Instead, people held out hope that price spikes were temporary, and so they didn’t adjust. Now that they don’t have a choice but to adjust, we get a lot more suffering than was necessary, and most people aren’t prepared. And of course we get empty promises from our political leaders about bringing prices back down – which results in more delays as some people will wait to see what happens.

This also points to the reasons I am not a ‘Doomer.’ I believe people will adjust, and that we will come up with solutions. But I also believe that due to our lack of preparation, we will undergo some difficult years. If prices hang around at these levels, then the faster people make the necessary decisions to reduce their carbon footprint, the less suffering there will be.

What we desperately need now is strong leadership. We need our political leaders to not only say “We are addicted to oil”, but to explain that there are no easy fixes. We need them to be up front that there is no relief coming from these prices, and we need them to provide incentives to speed up the changes we need to make (more fuel efficient vehicles on the roads, more riders on mass transit, more carpooling, etc.).

Lack of leadership got us to where we are. The cynical side of me says that lack of leadership will help delay the responses people need to make to adjust.

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July 3, 2008 - Posted by | car pooling, carbon tax, gas prices, gas tax

11 Comments

  1. on a related topic, I’ve yet to see any good answers for two questions:

    How are people and businesses going to afford to move closer to work, closer to public transportation when they have no available assets (i.e. mortgages under water etc.), or there’s no real estate available at an affordable price?

    How our families going to adjust when it makes significant economic sense to move every time you change a job? This actually falls under the broader question of what will be the nature of jobs and families in energy scarce future? are we going to give up on economic advancement and migrate back to the economic stagnation of 40 years for one employer? are we going to see more split families where one partner lives close to work and the other lives where they they work?

    Yes, these questions are directly tied into the price of oil but they are major society changing questions that will come about because of the price of oil.

    Comment by Anonymous | July 3, 2008

  2. The two-earner family is a conundrum. Where to live? We just have to say more people will make compromises, to be closer to work.
    In-town housing will boom, and cities will have to zone for high-rises, so that supply catches up to demand. I expect no disaster for suburbs, but more retirees, and we have plenty of those coming. It makes sense that retirees will move into cheap, suburban housing, and come into town only when they really want or need to.
    Also, if the GM Volt or similar car works, then the “dead suburbs” story is less compelling.

    Comment by benny "peak demand" cole | July 3, 2008

  3. Millions of people rent. It’ll be easier for those people to move closer to their jobs than for homeowners. I read somewhere that employers were finding that some applicants were turning down job offers because the job was too far from home. Obviously such tactics won’t work for everyone, but maybe it’ll be enough to make a dent, along with all the other things that people did in the early 1980s that lowered gasoline usage.

    Comment by clee | July 3, 2008

  4. Americans won’t be making wholesale changes overnight. Parking the RV’s,yes. Taking the Hummer around the block once a month,instead of every Sunday. We’ll buy PHEV’s,but only if they’re the size of an Expedition. This won’t be Europe anytime soon. We’ll suffer through 5 or even $10 gas the next few years. And then alternatives will become widely available. That’s just the American way.

    Comment by Maury | July 3, 2008

  5. Benny: you’re right, I suspect that the compromises people make will be to live in different regions and more tolerant of their partners having other partners. The other possibility is that long-term relationships will be discouraged by economic necessity and the only long-term commitment will be sperm donor and child support by mutual arrangement.

    I tend to agree with you about retirees except I think there will be a movement to reclaim old properties and build new cluster housing. Although on the point of going into town and they need to, I think it’s been almost a year since I’ve been into a city. I live 20 minutes from Lowell, Massachusetts and I haven’t had any reason to go there since my aunts moved out of subsidized housing a year and a half ago. I think it’s almost as long since I’ve gone to Boston or Cambridge. I think that trip was for a networking meeting and was just an in and out trip. I wonder how many other folks have similar experiences. hmmm.

    clee: yes. People rent but we still have a housing stock shortage for the next 10 years (approximate time to build most large housing complexes). But one of the thing to consider is that we are moving ever closer to a rental experience economy. You don’t own anything, you only rent it. With a rental mindset comes a lack of care for the property you use. If the rental agency can’t detect a failure, screw the next guy, I don’t care about them. when it comes to real estate, the “screw the next guy” attitude is not only part of the tenants mindset but also the landlord’s mindset. What you think the classic conflict with landlords is that they won’t fix broken property.

    I don’t know about you, but I am not thrilled with renting experiences in my life. I own many tools and hope to pick up a toolmakers lathe one of these days but my most precious tools are those I inherited from my grandfather’s. specifically tap and die sets that I rarely use but when I do, it’s a joy because they are well cared for. I would have never been given these gifts from my grandfathers if they had lived the rental life. I expect to hand my tools power and otherwise, to nieces and nephews (assuming they want them) otherwise, they’ll be sold as part of my estate.

    One other thing to consider about high-rise housing. it’s only a good thing if you like people. It’s also okay if you mix up income levels and break up blocks of low income housing. Otherwise the crime/gang issue becomes significant.

    I personally don’t want to hear, see, or even know anything about my neighbors unless we’ve arranged for meeting on the phone. I’m a very strong privacy/isolationist. I’ve probably got the tendency for my grandparents. My grandfather’s had their own workshops and they would use those workshops for privacy and personal space. My father used social clubs such as the Masons to keep his distance from my mother. Sometimes I wonder how they had four children. Anyway, the point is, with an increase in living density, we’ll need an increase in socially acceptable outlet so that people sharing living space don’t need to share it any more than they absolutely have to.

    Personally, I’m holding out for electric vehicles and low-cost solar panels just made for suburban roofs. in the meantime, as soon as I can afford it, I’m going two wheels as my contribution to reducing gasoline consumption for two thirds of the year. Instead of a pub or a workshop, I’ll use my motorcycle. 🙂 I would do electric but, they are so expensive, for the same money I could get a nice BMW motorcycle.

    Comment by Anonymous | July 4, 2008

  6. Good that you found your solution. Just curious, how many mpg does your motorcycle get?

    Comment by clee | July 4, 2008

  7. I’m wondering what it will do to communities to have constant churn? It might even be a sucker’s bet for the affluent to stay in a given town or city.

    My city has, for the past 20 years, always tried to chase the newest, hippest, up-and-coming people to buy into luxury condos. It’s a race, but to what? The bottom?

    With the churn of residents, most childless, what of the schools? How can a town, city or state promote long-term infrastructure when most of the residents turn out to be NIMBYs with no historic knowledge of past changes in their own neighborhoods? They can always move if they don’t like it!

    It seems like a developer’s and a politician’s dream to keep us churning in the short-term.

    Comment by David Moisan | July 4, 2008

  8. Another benefit of high oil costs.

    It can reverse outsourcing.
    http://abcnews.go.com/print?id=5235731

    Same can be said for attaching a price to carbon.
    http://gristmill.grist.org/story/2008/3/29/82021/1196

    Comment by GreyFalcon | July 4, 2008

  9. Lots of people rent in, for example, Germany, and it doesn’t seem to be a disaster there.

    What if those constantly moving people are mostly moving around one city, not necessarily moving long distance? Hypothetically, maybe they’d start caring about the whole city, not just the two blocks around their own house and to hell with everything else. Probably not, but maybe we can hope.

    I’ve seen plenty of ‘screw the next guy’ in real estate, I’m not sure it’s particular to any subset of real estate.

    I live in an 8 unit building. I’m aware I have neighbors. Sometimes I see them. If they really make a racket, I sometimes hear them. Sure there are advantages to living on your own 10 acres out of sight of anyone else, but there sure are disadvantages to that, too.

    Comment by Michael Pereckas | July 5, 2008

  10. In Australia we’ve recently ousted a conservative government that did stuff-all to address climate change, or shift our economy away from fossil fuels. We are a major exporter of gas and coal.

    When the new, more progressive government arrived, they quickly signed Kyoto, but otherwise have done little. Now as oil tops $140/barrel and fuel prices soar, they are being punished. In a recent by-election there was a sizeable swing, reportedly largely based on petrol prices. The public perceives that governments somehow are able to control prices, but refuse.

    Meanwhile in Australia and other countries truck drivers are blockading in protest. These forces push politician towards short term price plugs, without solving the real problem.

    Robert, you may be more optimistic than I am. It seems we need a crisis to stir us into action, but the lead times are so long.
    It’s like trying to steer an aircraft carrier looking only 100 meters ahead.

    Rod
    Fuzzy Logic Science Show,
    Australia

    Comment by Rodt | July 5, 2008

  11. I’ve lived in high rise apartments for severalyears now and have never known any of my neighbors beyond the passing “hey- how you doing” and move on.

    Also as far as residents caring about city infrastructure- again, in my experience most people care about the overall city. Even people with no kids want a good school system. I want the city govt to improve the quality of life (parks, crime, etc) in neighborhoods nowhere near mine- and I know a lot of people feel the same.

    Basically I don’t think your idea of a city or “high density” living situation is as bad as you make it out to be. Plus I got to sell my car 🙂

    Comment by laur | July 7, 2008


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