My Twitter feed shows that Sarah Palin appears to have been revived. All sorts of centrist-liberal types yell drill baby, drill! As a reaction to Russia’s invasion of Ukraine. They have been advocating for disregarding environmental regulations and even subsidizing fracking.
While this may be a good thing for the fossil fuel industry, it is not the best way to reduce greenhouse gases. There is an alternative. People can be paid not to drive. Although it might seem silly, it beats paying people for destroying the environment.
This could be done by asking people submit a form to IRS in which they indicate how many miles that they have travelled last year. We ask them to submit a photo of the current reading of their odometer. They must also submit another photo at the end. They are then entitled to a payment equal to 20 cents per mile they drive this year. (The calendar is adjusted so that it covers a 12-month period.
We would send $1,000 to someone who drove 15,000 miles last season and can reduce their driving to 10,000 this year. This is roughly how much they would save on gasoline if it was $4 per gallon and they get 20 MPG. This should be a good incentive to drive less.
The federal government can pay for bus transportation to be free of charge and to expand service. This will make it easier to shift to less driving. (The federal government will pay 90 percent of the costs, while the states will have to cover the remaining 10 percent. We send the money to the blue states because of course, the red state governors won’t agree to do so.
This plan, which would reduce driving by 20 per cent (640 billion mile per year), would cost the government just below $130 billion a yearly, roughly 2.2 percentage of the federal budget. Add $40 billion to the cost of bus subsidies and it will come out to $170 Billion per year, or 2.9 Percent of the federal budget.
This would save us slightly less than 2,000,000 barrels per day. Even with the generous subsidies for fossil fuels, it would take some time to increase production to this level.
I know that everyone is jumping around and claiming that people will cheat. What is the latest? We have the ability to limit cheating. First, we can subject people to random audits. This is similar to what we do with taxes or with the Paycheck Protection Program during the Pandemic Shutdowns. Any outrageous claims will be investigated. An auditor may visit someone who claims to have driven 50,000 kilometres in 2021.
There will undoubtedly be some people who cheat, but that should not excuse them from taking an environmentally-friendly approach to lowering the oil price on global markets. We are willing to tolerate huge amounts of cheating in areas such as the expense claims of businesses. It would be absurd for someone to receive $50 or $100 they shouldn’t under this provision.
The important point is that we don’t have to destroy the planet to show Vladimir Putin that we are strong. Instead, we can adopt policies that would make sense even without Putin’s invasion of Ukraine.
This first appeared on Dean Bakers Beat the Press blog.
