A Voucher Plan Suggested For Energy Conservation
December 28, 2001
Martin Feldstein, former chairman of President Reagan's Council of Economic Advisers, proposes using vouchers to curtail U.S. imports of petroleum in general and gasoline consumption in particular -- thus avoiding the economic inefficiencies of raising gasoline taxes or rationing.
Over the past three decades, the quantity of gasoline per-mile-driven in automobiles fell 40 percent -- with the prospect that over the next decade additional technological improvements can reduce that by one-half to one-third of today's level.
To achieve U.S. oil independence by 2020 Feldstein suggests using tradable electronic Oil Conservation Vouchers:
- If the government wanted to reduce gasoline consumption in 2003 from a projected 180 billion gallons to say 140 billion gallons, it would distribute 140 billion vouchers to individuals and businesses.
- Those who buy gas would pay the cash price at the pump plus one voucher for each gallon.
- The vouchers would not be pieces of paper, but credits available in a debit account.
- The individual would spend these by using a voucher debit card in the gas pump -- much as credit or bank debit cards are currently used.
Because the vouchers are needed to buy gasoline, they would have a market value determined by supply and demand. This would give drivers an incentive to purchase and use less gas. And they would receive a cash reward for conserving if they are allowed to sell their excess vouchers.
Although the government could control the amount of gasoline consumed by the number of vouchers it issues, it could not go on a spending spree, because no tax revenue would be collected.
Source: Martin Feldstein (Harvard University), "Vouchers Can Free Us from Foreign Oil," Wall Street Journal, December 27, 2001.
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