By: Sunil Datt, CGFM, PMP, MBA
Sunil Datt, CGFM, PMP, MBA, is Senior Managing
Consultant, IBM Global Business Services
I have a confession to make. I still lust for a gas-guzzling
Corvette! Me, who is known as ‘Mr. Green’ among friends? Yup, the very same.
Brings me back to something I said in my weblog of Aug. 20, 2008: Thoughts on
Post Sustainability Models.
“The spread of awareness and consequent behavioral change
are good, but not enough. If people do not see results in the near term, they
get disheartened, and revert to old habits. Good old economic incentives and
disincentives, I think, are still the best model for achieving real results.”
So now that gas is down to $1.75 or so at the pump, all of
us who had made resolutions to buy smaller, more fuel-efficient cars, replace
our light bulbs and install that solar water heater, are having sudden lapses
of memory!
That’s one reason why the gas tax makes more sense now than
ever before. Higher taxes! Heavens no, even the President-elect prefers to talk
about a tax cut for 95 percent of the people rather than a tax hike for the
other 5 percent—the latter is just a restoration of the right taxes of the
Clinton era, or expiration of the wrong tax policies of the Bush regime! But
hey, I am just blogging, so up with the gas tax! Yes, disincentive to go back
to the bad gas habits and the Corvette, now that even the Detroit trio is
promising fuel-efficient hybrids. Adversity makes for strange friendships.
Here’s a thought: “Sixty years ago, we could create a
calorie of food with less than half a calorie of fossil fuel. Today, a single
calorie of modern supermarket food requires 10 calories of fossil fuel to
produce.” (See IBM.Com/think.) Bad economics, right? Worse distributive
justice: If fuel costs rise (OPEC is cutting back production), it becomes
increasingly difficult to get enough food to the populations that have come to
depend on distant producers. At the same time, 30 percent of the food purchased
in developed nations ends up going to waste.
So, if a well-planned gas tax succeeds in keeping gas prices
in a relatively reasonable price range, will it accelerate the use of solar,
wind and “grass” (biofuels)? No, not until the alternative energy sources
become cheaper than fossil fuel sources. Until then, the gas tax will have to
be complemented with incentives for solar, wind and grass. The great thing is
that it will give you the maximum bang for your economic stimulus buck.
On the one hand, the gas tax will give you: more
fuel-efficient cars, more use of public transport, less traffic congestion,
less pollution, less urban sprawl, less dependence on foreign sources of fossil
fuels, and so on. On the other hand, it will give you additional revenue to
provide performance-linked incentives for solar, wind and grass. More
alternative energy sources will mean reduced degradation of the environment,
new jobs, and the multiplier effect that new jobs bring—higher income, higher
spending and growth—the virtuous cycle.
But wait, the Janus-faced predilection of us ordinary folks
toward alternative energy is just one factor that made me put a question mark
against the belief that we all
understand alternative energy = good economics. The Exxon-Mobils of the world
ask, “Good economics for whom?” After all, they point out, oil, natural gas and
coal provide 80 percent of our needs, and will continue to do so
through 2030. I have always wondered what
makes that latter part of the statement so deterministic—the determination of
Exxon-Mobil to make it so, or the probabilistic projections of academics that
factor in the Janus-faced nature of ordinary folks and the malleability of the
energy policies of President-elects when faced with intense lobbying pressures?
Neither, perhaps. What about the fat bottom line of oil companies? I said oil
companies, not energy companies.
So where am I going with this? A gas tax on retail gas for
the consumer, and…? Precisely! Tax the oil companies on the bottom line unless
they convert themselves to energy companies—companies that diversify into
alternative energy production. Over time, of course. Disincentives and
incentives, my friends, both are needed. And the closer to the pocketbook, the
better.
Talk me down on that one, if you like! Thanks.