Economist article on gasoline taxes

I found this interesting article in the Economist on gasoline taxes.

If you look at how low the taxes on gasoline are in Canada, it is clear to me that there is a lot more room to raise revenues from this source. It also says to me that a carbon tax is needed as the price of fuel is lower than it should be when compared to the rest of the OECD.

Other than Gordon Campbell and Stephane Dion, no one has the guts to move forward with the sort of carbon taxes we need. Stephane Dion saw his political career ended in part due to the carbon tax policy.

People will chose more fuel efficient options for driving if there is an economic signal telling them that is worth their time to do so. At the moment a saving of 3 litres per 100 km will only save you about $700 to $800 a year. With an additional $0.30 per litre carbon tax, the annual savings rises to $900 to $1000 a year. If you move from a 12 litre per 100 km minivan to a 5.5 litre per 100km sedan, at the moment you save $1300 a year, with the carbon tax this rises to $1700 a year.

The numbers are still small, but each rise will push more people towards choosing a more fuel efficient option and will push people to make more effective use of their vehicle.