Two Implausible Scenarios

MLewyn's picture

The Rand Corporation recently issued a report sketching out two possible scenarios for America's transportation future.  In one scenario, entitled "No Free Lunch", energy prices keep rising, leading to less driving and more compact development.  Under this scenario, government regulates greenhouse gases heavily and taxes driving heavily to support transportation.  In the second scenario, entitled "Fueled and Freewheeling", energy prices are stable, and neither regulation nor taxes increase.  Obviously, there will be more sprawl and more driving under scenario #2.

It seems to me very unlikely that all three elements of either scenario will occur simultaneously.  Why?  Because if energy prices go up, Americans are not going to want to tax energy further, nor are they going to be eager to impose regulations that cause costs to keep going on.  Instead, there will be much populist pressure to reduce energy prices, either by cutting the gas tax (from the Right) or through price controls (on the Left).  So high energy prices, although good for conservation based on the market, are bad for conservation through regulation and for transportation funding generally.

On the other hand, if energy prices are lower, taxophobia might be a little less intense, and there might be a little more support for raising gas taxes to fund transportation, or even for more regulation of greenhouse gases.


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