Bill Ford Supports a Gas Tax Increase


Photo: Ford
Stability Now!
Bill Ford, the great-grandson of Henry Ford and Executive Chairman of the Board of Directors of Ford Motor Company, recently said onstage at the 2009 Fortune Brainstorm Green conference that he would support a beefier gas tax in the US. His reasoning is that this would make it much easier for car companies to predict demand in a few years, something that wildly varying gas prices make hard, and that this stability would actually be good for business.Earth2Tech reports:

But one thing that can help focus markets with dart throwers is regulation. In that sense Ford actually endorses a gas tax hike. "If prices are gyrating wildly," he said, it becomes extremely difficult to know whether the company is planning the right vehicle or technology (if you're operating under the assumption that automakers should supply what the market demands, and that there's a lot less demand for fuel-sippers when gas is cheap). Ford noted that in the EU, diesel fuel "became an easy decision" for drivers after the government decided to make it much cheaper than gasoline.

Bottom line, he said, it's preferable to have a fairly predictable, stable planning horizon rather than even cheap gas for the short-term. In other words, if gas is going to be six bucks a gallon in five years, so be it — at least he can plan for it.

This makes a lot of sense. Not necessarily the European incentive to go diesel, but at least the price stability that doesn't make carmakers afraid that if they spend a few years making fuel efficient cars, that by the time they're on the market people will be back to wanting SUVs (or at least bigger, more powerful vehicles than what they've been working on).

I've said it many times on TreeHugger over the years: A revenue-neutral carbon tax would be a great way to tax "bads" instead of "goods". It would allow people to keep more of the money they earn at work in their pockets if they de-carbonize, and it would create a big incentive to make environmentally-sound choices (but if you want to blow your tax credit on a Hummer, you can still do so -- but at least now the incentive would be the other way around and the vast majority of people will follow their wallets).

Via Earth2Tech
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Tags: Energy | Fuel Efficiency | Transportation

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