Shari Shapiro of Green Building Law Blog and I had an interesting discussion on Twitter last evening regarding her post entitled “Tax Gas Now.” Without oversimplifying a cogent position presented by Mrs. Shapiro (a blogger I consider a friend), the basic premise is to assure a minimum price for crude oil through taxation.
Let me start with a disclaimer that I am not an economist, and am just voicing an opinion based on my view of the situation with the construction industry.
While the concept is interesting, I am not sure if the economy, and especially my clients in the construction industry, would survive such a hit (at least at present). I fully understand the need for reduced dependency on oil (for environmental and other reasons). However, the long term benefits may not ever accrue because of the short term hit that we would take.
The simple reality is that we are a seriously oil based economy, from heating oil, industrial use and, yes, cars. Too many people depend on oil for basic necessities at present and too many suffering companies (construction and otherwise) are dependent on gas to run their businesses.
At least in construction, gas and oil are major parts of the overhead of these companies, many of which are smaller and running on extremely tight margins. To suddenly have to pay a premium for gas (a premium artificially increased by governmental fiat), would be catastrophic.
In short, and in my opinion, the economy could not take such a hit and survive. We already have the government overly entwined with many banks and financial institutions because of the mortgage issues, etc. We don’t need more now.
I fully agree that green building is here to stay and should be pursued. However, a sudden artificial floor on oil prices in the US is not the way to go.
As always, your comments, suggestions and opinions are welcome and encouraged (especially Shari’s) 🙂
Update: The Oil Drum had a partial answer: Tax Credits, see what you think.