Today, Tom Friedman writes in the New York Times about the politics of gas taxes and energy security.

Coincidently, yesterday, Friedman played golf with Obama and Transportation Secretary Ray LaHood yesterday. (I wonder what they talked about...)

Friedman makes some good points about the need to have a clear price on carbon in the transportation sector. As analysis in our recently-released report Moving Cooler shows, a price signal can be one of the most effective ways to reduce emissions in the transportation sector, especially when paired with investments in clean transportation alternatives, congestion reduction, and other measures. 

We don't even need to go to $1 per gallon. A price signal of as little as $0.82 per gallon - equal to a 3 cent per mile increase - could cut transportation emissions by 3.3 billion metric tons by 2050 - equivalent to 7.7 billion barrels of oil.

However, Friedman's recommendations for how to spend the revenue from such a price signal miss the mark:

...a $1 tax on gasoline and diesel fuel would raise about $140 billion a year. If I had that money, I'd devote 45 cents of each dollar to pay down the deficit and satisfy the debt hawks, 45 cents to pay for new health care and 10 cents to cushion the burden of such a tax on the poor and on those who need to drive long distances.

The uses Friedman identifies are certainly important, but is it really wise to divert this money out of the transportation sector?

Consider:

• Our transportation system desperately needs investment: The American Society of Civil Engineers has calculated that our dirty, aging transportation system needs more than 1.2 trillion dollars in new investment over the next 5 years.
• Our transportation system is getting dirtier: Between 1990 and 2006, growth in U.S. transportation greenhouse gas (GHG) emissions represented almost one-half (47 percent) of the increase in total U.S. GHGs, according to EPA.
• Clean transportation creates green jobs: A study from the University of Massachusetts, Amherst found that climate-friendly transportation investments such as public transportation projects or repair and maintenance of existing roadways created more jobs per dollar of investment than new highway building, which can increase transportation emissions.
• Clean transportation boosts local economies: Leading local economic indicators - income levels, private investment, local GDP and tax revenue, commercial vacancy rates, etc. - often significantly improve after efforts to increase livability, including development of clean transportation facilities, according to 8 community case studies from around the country.
• Clean transportation boosts housing prices: Homes in livable communities, especially those nearby to transit, have held their value as the housing market has plummeted. One study found that homes in walkable neighborhoods commanded a $700-$3,000 price premium, controlling for proximity to city center, housing size, and income level.

Friedman's investment scenario neglects to consider that these items are a critical use of transportation fuel taxes, which have not been increased since 1994. 

Moreover, as Moving Cooler makes clear, substantial GHG emissions reductions are available in the transportation sector.  While most of the emissions reduction strategies studied in Moving Cooler would yield substantial consumer savings - $671.7 billion per year in the scenario above - they all require up front investment.

I can think of no better way to invest the revenue from Friedman's gas tax than clean transportation projects that will boost our nation's mobility, make our transportation system cleaner, create millions of green jobs, boost local economies, and stabilize housing prices.  That's truly a win, win, win, win, win.