The Next Oil Boom

Ryan Avent advocates again for a carbon tax:

We could pass a substantial gas tax increase now to take effect in two or three years. In expectation of the increase, consumers would purchase more fuel efficient automobiles, potentially boosting auto sales and reducing vulnerability to high oil prices. And I’m sure I don’t even need to say that a program of rapid expansion of transit and passenger and freight rail capacity, funded immediately by deficit spending and after recovery by gas and congestion taxes, would kill multiple birds with one stone providing stimulus, facilitating structural shifts, and reducing exposure to rising oil prices.

Rising oil is a threat. It will slow or kill recovery, and depending on how the Fed reacts it could generate uncomfortably high levels of inflation. And it’s not like getting off of oil is in anyway counter to long-term goals; climate change perpetually looms in the background. Let’s see some attention paid to this.