Green Cars And The Law Of Unintended Consequences

Energy and environment conservation has been high on every nation’s agenda probably even before the oil crisis in the 1970s.  Green cars such as hybrids and electric cars have been gaining popularity as well as auto market share in the U.S. driven in part by high oil and fuel prices, as well as government policies, and subsidies in some cases, pushing for higher fuel efficiency.

Most people think “eco-driving” or even carpooling is a win-win– saving gas money and the environment at the same time.  But it looks like what may be good for the environment, is actually bad news for the government.

You see, for each gallon of gasoline or diesel we gas up in our cars, there’s a portion of tax that goes to the state government to fund the building and maintenance of roads and bridges.  So unfortunately, more fuel efficiency and less driving even by carpooling means less tax revenue for the government, and the green car is also to blame.

For example, in Vermont, revenue collection of the state’s transportation fund has been shy of their target for seven straight years.  According to AP, 25% of Vermont’s expected $232-million transportation fund in the current fiscal year is supposed to come from the gasoline tax of about 20 cents a gallon.

In order to make up for the shortfall in the fuel tax revenue, instead of coming up with ways to cut costs, Vermont and Oregon reportedly are mapping out a possible new scheme of taxing drivers not based on how much fuel is burned but how far each vehicle travels as AP reports.

Although Europe has a longer history and higher adoption rate of fuel efficient cars, what’s taking place in the U.S. right now is actually the conclusion of a U.K. study published back in 2011: