Reducing Gasoline Consumption: Three Policy Options

摘要

Lawmakers concerned about the United States' dependence on foreign oil and its emissions of carbon dioxide-a key greenhouse gas-have proposed raising the corporate average fuel economy (CAFE) standards that govern cars and light-duty trucks. Improving the fuel efficiency of vehicles would reduce gasoline consumption. Another way to lower gasoline consumption is to raise the price of gasoline. Lawmakers could do that directly by Increasing the federal tax on gasoline. They could also do it indirectly by setting a limit on total carbon emissions from gasoline combustion and requiring gasoline producers to hold rights (or allowances) for those emissions, which they could buy and sell among themselves after an Initial allocation. That policy is known as a cap-and-trade program.