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The Climate Bill and Your Gas Prices

The NRDC did a little legwork and decided that the American Clean Energy and Security Act*, which passed the House last Friday, would result in lower fuel prices for us all. Here's their explanation of why:"The American Clean Energy and Security (ACES) Act allocates funding to produce the next generation of clean, fuel-efficient vehicles in the United States, and when combined with clean vehicle performance standards adopted by the Obama administration, the American on-road fleet will become about 25 percent more fuel efficient over the next decade.As a result, by 2020, Americans will drive more efficient vehicles and have lower household transportation costs. Even in the face of rising gasoline prices, cleaner vehicles will save money by sipping instead of guzzling gasoline."So that's great. Or is it? Lower gas prices might not be what we need at all. The price of gas will fall as America's on-road fleet gets more efficient precisely because the companies that sell gas will want to incentivize people to buy more of it. By themselves, falling gas prices simply reduce the cost of driving. With a lower cost of driving, people will be less likely to carpool, live closer to work, and take public transportation.With everybody so worried about how much the climate bill will cost the average American family, I understand why the NRDC would want to find evidence of savings. But we shouldn't be striving for cheap gas. It would make more sense for us to slowly ratchet up the taxes on gas to offset these declining prices and pump that revenue back into alternative transportation options.*Also known as ACES, Waxman-Markey, the cap and trade bill, or the climate bill.

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