New Rationing Profile

John Whitehead provides a link to this CBO Issue Brief which I think I may have mentioned before, but it is one which should be read. Additional review of it has increased my aversion to the Cap and Trade policy. The problem here is that We want to curtail the heavy Emitters of CO2 without adversely affecting the economy, or introducing any form of regressive tax upon Consumers. Taxation and Cap and Trade both fail the Test of Regressivity and in delivering the restraint necessary without savage impact to the economy.

I think the solution can only be found in Rationing. We are not talking about the old-Style ways of Ration books. We live in the era of Credit Cards and Computers, and Everyone has heard of Pre-Paid Cards. We also know that Households may have multi-vehicles and multi-Commutes, but combinations are common–children ride with Parent, etc. We also know that People utilize forms of fuel other than Gas, like Propane, Heating Oil, and Natural Gas; then We also have to introduce the fuel consumption of Electrical use. Any Rationing system must include all of the forms of Energy usage, and CO2 emissions.

The second element coming into play is the Free Market system under which We attempt to operate. We cannot introduce anything which obstructs the natural operation of Supply and Demand. Translation means We cannot interfere with the Price/Cost mechanism of the Market system; meaning that We have to leave the Pricing and Cost function in the hands of the Producers and Suppliers. Another Translation: We have to leave on-site Charges for the fuel expended.

A federal law is needed setting up a system of Rationing. I would suggest the Goal should be a grant of the equivalent of one gallon of fuel per person per day. Rights of the Children would be held by the Parents. Pre-Paid Cards would be sold at specified locations connected to a central Computer for the Country. These Cards with Credit would have to be presented on-site to obtain the fuel or Service–be it Gas, Community Gas line, electricity, or otherwise. Everyone must pay $0.25 per fuel unit on the basic Grant of one gallon per person per day, $0.50 per gallon for up to double of the basic Grant, $1.00 per gallon for up to a tripling of the basic Grant, and $2.00 per gallon for any over a Tripling of the basic Grant. This basically stipulates the basic Tax for Personal Use, all by purchase of Pre-Paid Cards.

Commercial use would be allocated in like manner, but with consideration of the excessive needs of industry. Commercial Trucking will lead to assignment of Credits, and thereby of selling of excess rights, unless individual Truckers must buy their own Pre-Paid Card allowances, best Estimate is fuel sufficient for 2000 miles per Week, at 6 miles to the gallon; so the basic Grant would be 337 gallons on which they would pay $0.25 per gallon. All usage over this basic Grant would bring a Charge of $1.00 per gallon. Other Commercial users of Energy will be charged in the form of Emission Cards, like the previous Grant Rationing Cards, but with escalating price for increasing levels of emissions. lgl