dgpcolorado
high altitude member
Not that it is remotely politically possible in the USA, but there is a solution to the inequity of just raising prices "across the board": rebate the increase to people on a per capita basis, not a usage basis.Yep, because incentives aren't aligned or transparent enough. It's too cheap partially because externalities aren't priced. Copious things are used wastefully by humankind. Scarcity (real or artificial) incentivizes efficiency, and the best way to create scarcity of fossil fuels is pricing. Unfortunately, it's very inequitable to just increase prices across the board, so we end up where we are with artificially cheap and abundant fossil fuels.
Under this scenario a carbon tax, say, would price in the externalities of fossil fuels by raising the cost considerably. This would massively incentivize reduced, or more efficient, use of fossil fuels. The revenue obtained would then be rebated to people on an equal-share basis, but that wouldn't affect the economic incentive provided by higher prices, which is the point. Winners would be those who use fewer fossil fuels than average, and that would likely include most of the poor. Losers would be those who use more fossil fuels than the average. (Bear in mind that everything would be affected because of increased transportation and production costs, at least until transport and production are mostly electrified with renewables. Sort of like the VAT in Europe, but bigger.) To keep the economic disruption within tolerable limits, it would need to be phased-in over several years.
I expect that you, and some others here, are already familiar with this idea but I present it anyway as a topic for discussion. Not that it can happen under our political system.