David Whitehead: We’re paying a lot more than gas gouging | TheUnion.com

David Whitehead: We’re paying a lot more than gas gouging

David Whitehead
Other Voices

Thomas Elias recently wrote that gas prices are higher in California than in the rest of the USA. A small proportion of that higher price is due to California gas tax, but the majority of the increase is unexplained.

Only the companies that produce the gasoline we need for our livelihoods know why the price is higher here than anywhere else in the USA.

Gasoline engines emit air pollution. California has done a lot to reduce the impacts of this air pollution on our health. Nonetheless, estimates are that over 100,000 Americans die each year because of air pollution, and thousands more are sickened. The gasoline companies do not pay for those medical (and funeral) expenses. We do.

That is called a “market failure” in economics. The market failure means that our “free enterprise system” marketplace is not fair for the consumer. Consumers do not receive the benefit of fair competition, and one product is able to compete unfairly against other products. It stifles innovation. It protects monopolies. In the case of air pollution, it actually kills consumers (the companies’ own customers.)

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The situation is unsustainable. Why do we consumers allow this to continue?

The fact that this market failure persists in our economy is a vestige of the past. Quite frankly, in past decades we could absorb the air pollution that fossil fuels produced. We needed the energy to grow and prosper. We still do need energy, perhaps more than ever. However, there are so many people on this planet that our atmosphere is having a hard time absorbing all that air pollution without an effect on us, and the effect is getting worse.

We must correct this market failure. We can do that with a price on pollution and a border adjustment for international trade. Those costs that we are all absorbing should be placed on the products that create them, not on us. We are paying with our health, our lives, and with the health of our atmosphere. Some say we are paying with the future of our children and grandchildren.

If all we did was place a price on pollution, that would be a tax. We would all have to pay that tax in increased prices for gasoline and other energy. However, if we returned the proceeds to American households in the form of a dividend, then the price on pollution is not a tax. That is what Ben Benanke, James Baker, George Schultz, Martin Feldstein, and many other conservatives say. In fact, all of the elements of HR763 The Energy Innovation and Carbon Dividend Act come from conservative economic practice.

What is really weird in all this? We are told by our conservative representatives in Congress that any discussion of a price on pollution is totally forbidden. It is a taboo subject. I don’t get it. It doesn’t make sense.

But then neither does it make any sense that energy companies would allow so much air pollution to accumulate that their own customers would sicken and die. My father, a strict conservative market broker and admirer of Rush Limbaugh, told me that our free market would correct these market failures without government regulation, because the energy companies’ continued economic viability would depend on increasing the number of customers and preserving an environment that would sustain their operations. He’s gone now, as are so many of the conservative elected officials he admired, and apparently the popularity of their economic principles as well.

The situation is unsustainable. Why do we consumers allow this to continue? Because we don’t want to be bothered? We want to keep doing what we are doing because we enjoy doing it? I can accept that. But sooner or later our families will be harmed personally in a way that we will notice with alarm, and we will want to see changes that will protect us. Some of us are already there. More will demand it. Why wait for that day to come? We have a bill that will fix it now.

Call your members of Congress and ask them to support HR763. In 30 years, we can reduce air pollution by 90% and save hundreds of thousands of Americans the horror of sickness and disease due to the polluted air we all must breath.

I think it’s one of the most patriotic things we Americans could do for our country.

David Whitehead lives in Grass Valley.

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