The Most Important Book You Will Ever Read

We have not even touched on the supply side, but the authors have much to tell us about biofuels. They talk about Brazil, where substitution of biofuels allowed the country to cut imports by $50 billion, create 700,000 new jobs, and save over ten times the investment made from 1975-1989. Brazil used a program of guaranteed government purchases, loans, and setting of prices to provide an advantage to ethanol to achieve these results. The authors note that such a program would be an enormous boon to a dying rural America as a byproduct of our energy independence.

What is the government's role in all of this? Again, trying to gain as broad a coalition as possible, they focus on private sector action. As they describe it, "government steers, not rows." So, for example, they propose "feebates." This puts fees on the purchase of inefficient cars, using these to fund rebates on efficient ones. To avoid forcing people to select certain types of automobiles (they do not want to interfere with customer choice), they are placed by vehicle type. In other words, inefficient SUVs fund rebates for efficient SUVs, so you can still choose an SUV if that is your preference.

Some people may think this is unfair. It is not. As the authors have shown, there are enormous hidden costs, such as the military ones, we are all forced to bear to enable some to drive gas guzzlers. Why should one person, who chooses a car that requires only that person's share of domestically produced oil, have to pay for military protection of the foreign oil his neighbor needs to feed a gas guzzler? If we can ask our young to go off to war and die so we can have gas guzzlers, should we not at least charge the people who drive them the financial cost? Right now, the responsible energy users are forced to support the profligate. Is this fair?

One thing about the above program is that it is revenue neutral. It funds itself. Conservatives should approve. Other suggestions include providing loans for lower income people to replace their old cars with efficient ones. Many of the oldest, most inefficient cars are owned by the poorest people. Alternatively, the government could provide guarantees to private lenders to lend to people who would not otherwise qualify. Here is my favorite suggestion, although it gets only one line in the report. Provide preferred parking spaces at malls, stores, and elsewhere to people with efficient cars. These would be something like handicapped parking spaces today. Make the people driving gas guzzlers walk farther. Watching drivers prowl parking lots for a space ten feet closer to the door tells me that this will be a major incentive for the typical consumer. Suddenly, the efficient car affords greater privileges. The cost is zero.

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