Punitive action such as taxing does not work in the long-term - look at the miserable failure that is Europe - unhappy people utterly giving up on their individuality expressed through road trip culture.
As has always been the way in the past and will continue to be in the future - technological innovation bringing the life-style-related features that consumers want and will, without their knowing, save a substantial amount of emissions, reduce vehicles in landfill, and (re-)provide a vibrant economic industry, is the sole way. Is there going to be increased climate change, environmental degradation, and failing infrastructure in the short term along that path-of course. It is evil and the near-future is grim, but it is the only way to move society into the next stage. Many disparage the industrial revolution for bringing ills to society - but no society wants the undeveloped outcome of having taken the other route - despite environmentalist concerns and claims to the contrary.
People are generally idiots and the worst thing you can do is tell them so by taxing them to change their behavior. That way is retreat, conflict, and chaos - vastly unpopular and political suicide. The environmentalist dream of people behaving and caring about the long-term of either the environment or their industrial footprint or their contribution to a compact urban layout is shear nonsense - only attainable by deceiving the public with big, bright, shiny cars with cheap running costs (that don't emit, can be plugged in, and can be made part of a hub-type transport network) despite the sneers and razzing of angry (and gradually submitting) enviros.

Jer:

If I may paraphrase (and if I understand your message correctly) you are saying that the only reasonable way to move forward is to do nothing and wait for technological solutions to things for which there is no market incentive.

Or are you arguing for command-and-control style regulation (like CAFE standards), saying that they will provide the most efficient outcome. -That carmakers will eventually be able to meet the standard while still building the big bloated cars Americans like to drive?

I would argue that by taxing gas (or preferably CO2 in general) we would be creating an environment where there was incentive for such innovations. As we saw last summer, we can very quickly change the spending habits of Americans with a strong price signal, with the added benefit that the revenues from a gas tax could displace other distortionary taxes, or could fund progressive social programs and services like those the Treehugger points out are such crap here (like public education).

Lucas

when did america tried a $2.00 tax per gallon ?

I am amazed by the amount of lack of understanding of the way market work by some people who post here.

please forget 1 second your hate for the word "tax" and try to think a bit: america alone consume 25% of the oil produced in the world, right? Now if you put 2$ gas tax per gallon you will destroy the demand in US that will weight significantly on the ovewhole demand and prevent crude oil to increase like we saw last summer. What people don't understand in this country, is that a gas tax is the best insurance against future uncontrolled oil price increase (and the dictatorship of OPEC) when the production will have hard time to meet demand as we are heading for very soon.

2nd, if you were doing your research properly on what is done in europe, where the sale tax is about 20%, you will see that it doesn't means that the price of good are 20% higher than if there were no sale tax. The market forces play here, if you increase the sales of a given amount, the market price of the goods will only increase by at worse half of the percentage of the tax increase. It is not that difficult to understand.

Sales tax don't kill the economy since it is re-injected and redistributed in the economy. The failure of the american economical model is the failure to understand that the best economical system is the one that best redistribute the wealth, and the worse one is the one that concentrate the wealth as it is happening right now in US. That's what is killing america now : the ever worse redistribution of wealth, this is the recipe for the revolution and that's exactly what happened in Europe before and triggered all the revolution we have been through.

Treehugger –
Do you mean to imply that maintaining military supremacy will be the cause of economic decline? This is simple minded belief in what you wish was true. Like thinking people do NOT want to buy big cars.
Countries that sunk because there were spending more on military than on education, healthcare, infrastructure include North Korea and Cuba and ???
Umm, were they super powers?
I expect China might well surpass us in the foreseeable future.
But not because of their spending on education, healthcare and social programs, but because of their totalitarian rulers and their new brand of free market.
Guess what, we will be in BIG trouble when China follows their big economy with a big military. But, if we follow your philosophy, we will be slaves with clear consciences.

In regard to gas taxes.
We have a government to levy and collect taxes so as to provide for common defense and promote the pursuit of liberty and other essential actions.
Taxation should only be used in lieu of market forces to force absolutely essential behavior that would otherwise not occur. That’s not socialism, that’s survival. Taxing/spending for things minorities (particularly Pelosi and those who pay no taxes) want is the worst form of socialism.
But cheap gas begets big cars. This is too simple to argue.
Oil is now $40/bl and gas is $2/gal.
With today's low tax it is likely to soon be over $120/bl and $4/gal.
With higher gas tax, it might become $60/bl & $4/gal.
A big, big improvement and, I firmly believe, absolutely essential.
Both ways $4+ /gal reduces consumption but one way works sooner and reduces imports.
This is like income taxes; they are mandatory (for some of us).
Other taxes conceivably might replace income tax, but to think voluntary contributions to the Government could, is laughable.
Nor can I imagine any way a “market” could fund the government or get the jump on these recurring oil crises by reducing our consumption NOW.

Raising gas taxes takes political guts, and aren't we overdue for at least ONE thing that is NOT business as usual. I’m not holding my breath.

Well yes, the USSR collapsed because of military spending. But it was OUR military spending that accomplished this.
Their communist society could not support the military spending required to keep up.
The Iraq invasion was a very huge (and unnecessary, IMHO) drain of money (it was mostly emergency discretionary and supplemental spending though, not DOD base) from the budget with essentially no "product" or domestic purchases (at least in regard to the soldiers stationed overseas).
But most of the base military budget is for nation defense as described in the constitution and most of it is spent domestically. Afghanistan is a big exception, but I think it is also not funded from the base DOD budget.
“this idea tha China will try to outpace US in the race for military spending is just plain ridiculous”
How can apparently rational people believe GM management is capable of more malicious behavior than the Chinese rulers?
Assuming you’re serious, China’s claimed expenditures are now 10 to 20 % of ours, and they’ve only just begun.
Our economy and the new admin will probably reduce military budgets but I doubt they will let it go down very much. And Iraq and Afganastan will continue to soak up $$$

Actually the US spent so much for the military during the Cold War because it had to protect the Europeans from the USSR. Had the US been smart they would have waited out WWII and then cut a deal with Germany which would probably have won.

Ja voll, Mannstein.
And 完全是.

Back to PHEVs. There is no way that drivers of pickups and large SUVs are going to switch to Prius-like cars. Think 'death before dishonour'. There are also low wage workers with long commutes that usually buy cars a few years old. These people can no longer get easy credit. Therefore PHEVs have neither the high mileage range nor the low price. Maybe at a pinch they might get into something like the new Opel turbo-CNG van if it was cheap enough.

If this is right then GM is gonna go broke with the Volt thereby wasting billions of taxpayer's bailout money. It all seems like a slow motion crash.

The Nissan Tsuru, a 1990 nissan sentra still being manufactured in Mexico sells there for around $6000.. a simplified design and economical. This is an affordable car for poor people.

Very hard to justify the cost of a hybrid based on savings, and that is what most normal people base their decisions on. You want people to afford better cars?, stimulate the economy by cutting taxes.. it always works.

Wow. so many interesting topics in the same thread!

First, taxes are needed because the price signal is too short sighted. You can't wait for the price of oil to grow again to force people buying more efficient cars. A car is around for 10 years and replacement of the complete lot of vehicles would take a long time. We have to act on decreasing oil consumptions immediately, otherwise will find ourselves in a situation were the oil is scarce and the infrastructure and technological solutions are still not there. At that point, we will only be able to cut usage by not doing things, which would depress the economy even further.

Second, the american debt can grow pretty much indefinitely without the dollar collapsing, since the dollar is from Bretton woods the standard currency, and is also the dollar used to buy/sell oil (and since energy is the primary need of a nation, then dollars are necessary to every one).

Third, the military spendings are necessary for USA to keep control of the oil producing regions, which are vital to maintain power. No one wants to invade USA, not even URSS wanted to invade USA. It has always been (from the birth of humankind) a battle for the control of resources. This does not mean that China is not a potential trouble. They are already acting quite aggressively (although with no weapons) to control resources in Australia and Africa.

Alessio

Good post, tax is a way to anticipate the big future problem with oil

but you think that because the dollard is the standard trade currency then debt can grow indefinitely? yes and no, passed a certain limit and when other countries fele that america can no longer honor their debt, they will use other trade currency like Euro, and even Huan even if they are no officially recognized as standard trade currency. We are not that far of that point.

No US don't need to keep control of the oil producing countries, if these countries becomes politicaly unsatable, then oil price will soar and custometr will reduce their dependance to oil and these countries will be screwed so they will take care of their political stability by themselve because they have no choice.

Wintername
You are right a gas tax can be neutral, you increase tax on gaz and reduce it on income, you put taxe on emissions and reduce on incomes, then suddently the society becomes much more efficienet and pollutes less while the level of taxation hasn't changed overwhole. For non tax payers you developp public transportations, bicycle lanes,small efficient vehicles.

I agree with you that the Volt won't solve the problem any time soon if ever. But you can design cars that get 60 MPG or even better without electric hybrid tech, look at the Aptera, or altenative vehicle like the Venture Car or the Carver or the Nano or even the Honda CRX from the 80s. The Venture car is probably a pretty damn fun car to drive, and can HIT the 100MPG without really new technology. Technologies like pneumatic hybrid, stop and start without hybrid (Mazda), alternator regenerative braking (BMW) variable compression ratio (EMC-5), improved aero (Mercedes bioconcept, Aptera) and lightness (Aptera again) are not more expensive than current tech.

@Toppa:

If you're going to write German I suggest you get it straight to be taken seriously. How about Ja wohl.

Incidentally the US hasn't won a war since the end of WWII. Some historians even question whether the US actually won that one. They base their doubts on the fact that half of Europe was enslaved by Stalin when the fighting stopped including Poland. Didn't Britain and France declare war on Germany to maintain Poland's freedom in 1939? Some victory for the West.