Reducing Vehicle Pollution Requires Substantial Gas Tax

Mar 6, 2017






Research is increasingly identifying how poor air quality negatively impacts human health. One recent study indicates that air pollution can even alter the effectiveness of antibiotics. Some economists have proposed that a gas tax could help some Utah residents breath a little easier.

In theory, a tax on gasoline would reduce the number of trips Utahns make in their cars and trucks, reducing vehicle emissions, and thus reducing the concentration of harmful pollutants in the air. To be clear, this gas tax is hypothetical. It is not being considered by policy makers at this time, but was simply part of an experiment to see what kind of economic disincentive would be necessary to eliminate the worst bad air days in Cache Valley, Utah. Shockingly, such a tax would have to be significant as one of the study’s authors, Arthur Caplan, explained:


“When the results finally came in and that number -- $5.72 per gallon, was what came out of the analysis, I have to admit I was a bit set back, because it seemed so unrealistic to me. Irrespective of the fact that it does seem to pass, at least in some circumstances, a benefit-cost test, I was still set-back because of its political intractability.”


Five dollars and seventy-two cents per gallon. That’s what the tax would have to be. Considering that at the time the data was collected for this study, gas was about $3.50, the tax would have raised the price at the pump to about nine dollars and twenty-five cents per gallon.


Here’s the part of this story where another reporter might quip, “Should we expect to see gas prices in Utah spike anytime soon? Don’t hold your breath.” But maybe you should. Because those benefit-cost analyses that Caplan mentioned, some show that paying just about $10 per gallon at the pump is still cheaper in the long run than the public health cost of chronic exposure to unhealthy air.


“People suggest that these costs are hidden in a way, that we don’t think about them. Our lives are busy and hectic and we don’t stop to think about what we’re breathing into our lungs, and so in our minds we keep hidden these costs. But our medical professionals, our health professionals, our researchers, are telling me that they’re real. In fact, they’re very high and very damaging. So when you take it from the research and put it up on the screen and say these are the numbers, and you actually start looking at the numbers, in dollars and costs, then it becomes real. ”

The study was published in the journal Environmental and Resource Economics.