Does recent gasoline price sensitivity data show that HR 763 Carbon pricing insufficient for the transportation sector?
This answer provided by: "Heh" moved to chat so it can't be seen:
"Of course carbon pricing is insufficient for the transportation sector"
Recent data show a price elasticity of demand for gasoline of -0.1 The following graph showing the change in price is mirrored by change in vehicle miles traveled seems to provide strong evidence that the price elasticity of demand for fuel in the transport sector -0.1.
By dividing the maximum range of vehicles miles traveled 8.6% by the maximum range gasoline price 89.2% we estimate the price elasticity of demand for gasoline = -0.0964
Here is the corresponding data: https://www.energy.gov/sites/prod/files/2018/04/f50/fotw_1024_web.xlsx
Point Price Elasticity of Demand formula: PED=((Q1-Q0)/Q1)/((P1-P0)/P0)
-0.1=((50-100)/100)/((P-2.66)/2.66) // Q0=100, Q1=50, P0=2.66, P1=\$15.96
\$16 per gallon to reduce quantity demanded to 50%
Corresponding \$1330 carbon price is 3-fold greater than HR 763 maximum \$430
-0.1=((10-100)/100)/((P-2.66)/2.66) // Q0=100, Q1=10, P0=2.66, P1=\$26.60
\$27 per gallon to reduce quantity demanded to 10%
Corresponding \$2394 carbon price is 5.5-fold greater than HR 763 maximum \$430
Any legislators that are very confident of their own carbon fee estimates would have no legitimate basis for rejecting a Carbon Fee Fail-safe and Safeguard that only takes effect if their estimates are proved to be incorrect.
Carbon Fee Fail-safe and Safeguard
Every Year once a year:
if (Years_Behind Schedule > 1.0) // Carbon Fee FAIL_SAFE
Carbon_Fee = (Years_Behind Schedule * $15);
else if (Years_Behind Schedule > 0.0)
Carbon_Fee = Carbon_Fee + $15; // HR 763 Trigger
else if (Years_Behind Schedule > -1.0) // Carbon Fee SAFE_GUARD
Carbon_Fee = Carbon_Fee + $10; // HR 763 Default
I am ONLY looking at the PED for the transportation sector to prove that the fixed pricing of all of the carbon fee and dividend programs must have much more flexibility that kicks in if we fail to meet carbon reduction targets.
WE CAN'T RISK LOCKING IN A CARBON PRICE THAT IS FAR TOO LOW.
A US law (and every other similar US law) that is currently backed by the Citizen Climate Lobby is based on the premise that raising the price of gasoline a tiny little bit each year until at the end of 30 years total prices have increased by 100% to 150% will cause a 90% drop in emissions from gasoline.
These two links seems to show that these expectations are totally unrealistic: