“How economists and climatologists deal with uncertainty…and each other.”

Dave Munger in Seed Magazine:

MungereconservePeople across the nation are socking it to state gas tax revenues by buying energy-efficient cars, making it more difficult for states to pay for road maintenance. Legislators from Oregon estimate that as a result of all those hybrids, by 2014 the state’s gas tax revenues will begin to decline; as a result they may replace the current gas tax with a mileage tax.

Most climatologists agree that curbing greenhouse gas emissions and fighting global warming will require that we build more energy efficient cars and homes. Yet some of these choices are still not cost effective. Even as gas prices climb past $3 per gallon, filling the tank on a standard-engine economy car is still cheaper than plunking down the extra money for a $22,000 Toyota Prius. (Over the long term, however, a Prius requires only a $2.28 gas price to recoup its cost premium over an $18,000 Camry).

Economists have called for incentives to force conservation, such as increasing gas taxes to promote moves to more efficient cars or providing subsidies for installing solar water heaters. But when these incentives actually work, they can deplete tax revenue steams, creating a disincentive for the state to continue the incentive. And increased taxes can be unpopular, which is why Oregon is now considering alternatives to a gas tax.

More here.