Gas should probably cost even more.

@ Andrew:

One cost your analysis excluded was price fluctuation.

(Over a Barrel: The Costs of U.S. Foreign Oil Dependence (Stanford Law Books)
John Duffield)

“Uncertainty costs money,” says David Edwards of VantagePoint Venture Partners, and it is now the fossil fuels that have increasingly uncertain prices attached to them, and it is the renewables that have increasingly certain prices attached to them.

Center for American Progress in November 2007,
Our economy’s dependence on oil, independent of whether it is domestic or imported, contributes significantly to our vulnerability to price shocks….The oil market upheavals of the last 30 years (such as the 1973 Arab oil embargo) have cost the U.S. economy some $8 trillion.

Another missing cost was human lives:

The Environmental Protection Agency (EPA) ranked gasoline as the number one source of toxic emissions.

The Harvard School of Public Health attributed 70,000 deaths to these toxic emissions annually. Lives are shortened by an average of one to two years, according to research by the American Cancer Society and Harvard University.

In a 1999 report, the South Coast Air Quality Management District in Los Angeles concluded not only that mobile pollution sources are responsible for about 90% of the total cancer risk in the area

Its only going to get worse.
Inform Inc, Dec 10, 2008: “At current rates of use, more oil will be burned in the next 20 years than has been burned throughout all of human history”

2 Responses to Gas should probably cost even more.

  1. Andrew Chesley says:

    I don’t understand what’s going on here. I posted that article because we had a discussion about a week ago in which you disagreed with my argument that gas should be priced about $5/gal. I agree with the first article you posted, but I also believe that the gas tax in the study I cited takes the cost of the deaths into account.

  2. joeyglick says:

    Here, I am suggesting that there are additional externalities that the $5 analysis fails to take into account.

    The first is in oil price fluctuation, which has cost the US economy around $8 trillion over 30 years.

    The second cost is deaths from pollution. I don’t know how your study calculates the costs of pollution, but if its true that 70,000 people die from pollution each year, and also that the average life is shortened by 1-2 years, I would be particularly willing to raise the cost from 12 cents to something much greater.

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