Nobel Laureate Penzias: U.S. Needs a $1 a Gallon Gas Tax

By Michael Kanellos

What will get the U.S. moving toward greenhouse gas reductions and greater energy autonomy? A $1 a gallon gas tax, says Arno Penzias.

Penzias, who won the Nobel Prize in Physics in 1978 (with Robert Wilson) for confirming the Big Bang and who now works as a VC at NEA, says that the tax should then be paid directly to the states. (I ran into Penzias in the hallway at the Cleantech Forum taking place in San Francisco.)

What else needs to be done? Smart grid. “We’ve got to have a grid” that works better, he said. Penzias is also something of an advocate for nuclear for providing baseline power.

New technologies, he added, aren’t necessarily the answer nor do we necessarily have the luxury of time to wait for them. Greenhouse gas reductions could be accomplished with existing technologies. They just have to be implemented.

“We’ve got to make do with what we have,” he said.

Getting infrastructure implemented in the U.S., however, isn’t easy. He said he’s been waiting for better cell coverage at his vacation house for a while.

Comments

[farmer448:]

So like crack addicts we will keep filling our SUV's with cheap Oil. A true energy policy really only works when you use the price mechanism. We need to raise the price of transportation fuels to encourage more efficient autos.

The one dollar tax proposed above could be done by adding 1 cent to the gas tax every month for the next 8 years.

The real trick is to keep this additional money for use in infrastucture projects and not earmarks.

Feb 25 09:14 AM

[jepittman:]

I see the logic for a gas tax but not now. This economy needs lower energy prices to cushion the economic decline. The public is getting some real relief at the gas pump and that relief is mostly being spent. Restaurants are still busy and Wal Mart and other discount stores are doing brisk business. People have money left over for small convenience store purchases. Hike gas a dollar a gallon and a lot of that will disappear.

Feb 25 10:28 AM

[nakedjaybird:]

Come on. No gas tax. Let's keep sending money overseas!!!!!!!!!! Duh.

Feb 25 11:26 AM

[jmmx:]

Global warming deniers are like holocaust deniers: they both use trumped up, phony arguments.

The results of global warming, if left unaddressed, will make the holocaust look like a picnic. The death and suffering from famine and disease will be beyond belief. Do people really want to be responsible for this?

Is there some uncertainty? Sure there is some. There was uncertainty about Hurricane Katrina - exactly where it would land, exactly how strong it would be. But people still moved out. And a good thing that was.

Feb 25 11:36 AM

[jmmx:]

A high gas tax might actually help keep prices down.

Let's face it - the ONLY reason gas is back down right now is because demand has fallen sharply. The gas tax would"

1- discourage demand by pricing
2- use that income to build clean energy alternatives which reduce demand further

So - the question is: If you are going to pay $4 per gallon, would you rather your money went to creating clean sources of energy and creating jobs here in America - or would you rather send it to Saudi Arabia?

Feb 25 11:42 AM

[TBill:]

Lessee, we need a tax to take more money out of the hands of hard pressed consumers, all in the name of a hoax? Just another example of how the Noble's have become politicized.

You really wonder how people can be so counter productively stupid. But there is one gas tax I could go for: Put enough of a tax on gas to get the price to say $2 per gallon. If the price goes higher, reduce the tax. This will give government more money to waste during periods of abnormally low prices, while keeping the consumers from thinking low gas prices are here to stay... which we know isn't the case.

Feb 25 12:19 PM

[jmmx:]

Let's suppose that Mr X buys a brand new house. He decides he would like to build a swimming pool. I guess that everyone agrees that he should be allowed to build the swimming pool.

So he calls a contractor, who tells him that it will cost $20,000 to build the pool he wants. So he pays and has the pool built.

The next spring come the rains, and because of the excavation, both half of his house and half of the neighbor's house collapse. The contractor is gone, now he has to pay $500,000 to fix both houses.

What is the true cost of that swimming pool? $520,000.

Burning fossil fuels is the same thing. The REAL costs are hidden.
Now - we KNOW that the intensity of a hurricane is related to the temperature of the water underneath it (e.g. the Gulf of Mexico). We also know that the intensity is very sensitive to this, a one degree change can have a large effect.

Let us suppose JUST FOR THE SAKE OF ARGUMENT (I am not saying that this is true, only a possible example) So - let us suppose that global warming increased the temperature of the Gulf 1/4 of a degree F just before Hurricane Katrina. Also, let us suppose that this was just enough to push it to a category 3 (at landing) from a category 2. If HK had remained a category 2, it is likely that the levees would have held and the total disaster would not have happened.

So now what is the TRUE cost of a gallon of gasoline?

Feb 25 12:58 PM

[Socialism c...:]

Word to Penzias: stick to physics...you're ignorant in the areas of economics and public policy!!

Feb 25 01:05 PM

[Jason Rines...:]

We need you running the NEA Steve. I would wager my life you would create a free-market solution to make green-energy profitable.


On Feb 25 06:18 AM The hand wrote:

> i could see this tax in normal times, but during a recession - regardless
> of the good intentions - probably will result in further recessionary
> effects.
>
> during recessions avoid new taxes, import duties, and labor rate
> increases.
>

Feb 25 01:08 PM

[P. Kalven:]

Don't worry oil and gas prices will rise without further taxes long before any feasible energy alternatives kick into the economic equation as the world's conventional oil reserves diminish in the next few years.

It strikes me that a Carbon Cap is trading in thin air, but then given the current economic melt down, show me the difference.

It makes good sense to invest in the development of alternative energy; but it also makes sense to support the existing available structure of energy within North America. Consider what happens when the OPEC countries run out of conventional oil and the impact on the economy on that day in the near future.

It appears prudent to consider developing the power grid and improving the infrastructure of energy delivery on all fronts, not just power, but natural gas and oil as well. Energy is a cornerstone of the economy and I am mystified at how the industry is made to look like a villain, I’m sure like peanut factories there are those that skirt the regulations, but the many folks I know in the energy industry are focused on the efficient, safe and cost effective ways of exploring, developing and delivering the resources and take the environment impact into serious consideration, often in a proactive manner not noted by the media or casual observer.

Much of the pollution problem does exist with outdated methods of consumption, so again the effort to spur cost effective alternatives to reduce consumption by gleaning higher output makes sense.

This summer while you are driving behind the car of the unemployed fellow who just lost his house, that is spewing burning oil in thick black clouds, I do hope you enjoy the benefits of your Hybrid that can go all of 40 miles on a battery.

Again I am struck by the need to focus on building the recovery from the bottom through supply and demand; the movement of goods, services and capital. Any program that does that will be beneficial, any that cannot trace a path to doing that is more risk rather than benefit. Big Government, Small Government, Taxes, Tax Cuts, Deficits and Debt debates will prove themselves only in the arena of the market, and the market is stalled, capital and energy are pent up and I suspect Dr. Penzia understands what happens next; the question is will it be a positive explosion or destructive implosion?

Feb 25 01:39 PM

[Steve in TN:]

Gasoline taxes are one area where Europe is ahead of us. I don't recommend an immediate $1/gal. tax - it should be implemented slowly, say 10cents/gal increase per year for 10 years. However, our congress would never have the courage to implement a gasoline tax.

Feb 25 01:54 PM

[ROLEXDAYTONA:]

All of you are nice guys but are or too young to understand, or too old to remember.
Green "THEME" wa here already 30-40 years ago, it goes ON OFF depending on Oil prices, Oil up green is in fashion, prices down, green out of fashion.
Nobody ever made any money on speculating with it, this is politics+economy+Texas... No Green Parking Allowed Here.

Feb 25 02:18 PM

[carbonates:]

Nobel Prizes are no longer given for merit, but instead are mostly a political tool for advancing the political viewpoints of the Nobel Foundation.

Nothing he says makes sense in terms of science, only in politics.

Feb 25 02:55 PM

[@TexasER:]

I’ve been a fan of higher gas taxes for some time. Free market capitalism is great on 1-5 year time horizons, but terrible much beyond that. No shareholders (or managers) have the ability to wait for returns 10 or 20 years down the line.

What the good doctor needs to add, is an escalating tax. $0 this year, going to say $10/gallon over 10 years. That would provide the predictable incentive for the private sector to invest in building (and inventing) more efficient technologies. It would also give people time to phase-out their old inefficient equipment without losing their shirts.

Of course, the problem with this approach is a lack of political will. (duh) It would be so unpopular, that if I were looking to invest in this technology, I might not trust a future congress to keep the incentives (taxes) in place.

And I didn’t trust the government to begin with.

Feb 25 04:21 PM

[jksisco:]

Any oil/gas that is produced from offshore leases or Federal lands produce royalties for the government, the net proceeds from those should be rolled into alternatives. If we are "serious" about being energy independent, then, why are those areas not being utilized as soon as possible.

Feb 25 04:33 PM

[HiSpeed:]

$1 gas tax is the stupidest idea I ever heard for an economic environment like this one. It hurts the poor and the middle class the most, and these are the folks who have already been hurt the worst by the recession.

Feb 25 04:48 PM

[X-15:]

Gas tax --or the dollar goes to the floor as kitty litter.

Switch to Nat. Gas for Heavy Trucks & build Nuke , Wind, and smart grid.

President Obama should have gone for T. Boone Pickens plan.

But again we're halfassing again!

Feb 25 06:53 PM

[devassocx:]

The world's economy runs on cheap energy...no way around that.

This guy needs to pay a stupid tax and leave the rest of us alone!

Guys like this never cease to amaze me!

Feb 25 11:25 PM

[Kunst:]

I assume you are referring to yourself, as usual.


On Feb 25 08:31 AM Ferdinand E. Banks wrote:

> So Dr Penzias is "something" of an advocate for nuclear energy. But
> please, we don't need "something" of an advocate. What we need is
> a credible someone who understands the economic advantages of nuclear
> in a world where fossil fuels are limited, and carbon taxes of one
> type or another are here to stay. In particular, what we need are
> people who know what 'opportunity cost' is and have the knowledge
> and prestige to hold the attention of the great unlearned while he/she
> explains it to them.

Feb 26 02:46 AM

[Carlos Lam:]

On Feb 25 09:14 AM farmer448 wrote:

> We need to raise the price of transportation fuels to encourage more
> efficient autos.

AKA : we need to artificially drive up the price of one fuel to make other, less cost-effective fuels more attractive.

Feb 26 11:31 AM