The State of Subsidies

There’s a very interesing discussion going on at Ezra Klein in response to a post on subsidies for hybrid technology (which seems to be moving in the direction of increasing “muscle” as opposed to improving fuel efficiency). Ezra believes a subsidy for fuel efficiency itself is the best approach; some of his readers believe a gas tax holds more potential for changing behavior. I have to wonder if this isn’t simply an argument between those who prefer a carrot vs. those who like a stick — both options, it seems to me, would push the market towards developing and selling more fuel-efficient cars while leaving lots of flexibility on how to do it. The gas tax might have the added bonus of raising demand for public transportation, but in our suburban culture, I have to wonder if that demand would be high enough to push mass transit further up on the list of priorities.

Technorati tags: , , , ,

The Green Guide – Informing Today’s Choices, Shaping Tomorrow’s World

Leave a Reply

Your email address will not be published. Required fields are marked *