Feebates

28May07

Sunday’s San Jose Mercury News has a nice editorial about a proposed Assembly bill to establish “feebates” for fuel-efficient cars, as a means of combating global warming. Feebates are sort of like Pigouvian taxes on steroids. Whereas a normal Pigouvian tax simply tries to make you pay for the negative externality you create, the feebate goes a step farther. It imposes a penalty on buyers of cars that put a lot of carbon into the air, such as SUVs, just as a Pigouvian tax would. But the feebate also pays a rebate to people who buy cars that minimize carbon pollution, like hybrids. Instead of being merely punitive, the feebate has both a carrot and a stick; it’s a two-fisted strategy. And we need all the fists we can get as we fight to stave off the Dawn of Global Warming.

The bill is AB 493, introduced by Ira Ruskin, D-Los Altos, with help and input from the Union of Concerned Scientists. The Union has a web page on the bill and the thinking that went into it here.

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