Rising gas prices may be the bane of most drivers, but the International Monetary Fund says those costs aren't nearly high enough.
In a book released today, the IMF states simply, "Many energy prices in many countries are wrong." The international bank backs tax reform that would peg fuel, coal, natural gas, and diesel prices to the cost of global warming, air pollution, and the impacts of motor-vehicle use.
For the U.S., for example, that could mean a $1.60 per gallon corrective tax on gasoline to cover health impacts from car exhaust pollution, traffic accidents, and wear and tear on highways, plus taxes on coal and natural gas to account for the energy sector.
But the benefits, the report says, would be felt across the spectrum. Incentivizing people to use less-dirty fuel would lower worldwide deaths from air pollution linked to fossil fuels by 63 percent (the bulk linked to coal) and slash carbon dioxide emissions by 23 percent. The gains could even be felt in gross domestic product, with an average 2.6 percent boost.
IMF Managing Director Christine Lagarde admitted that imposing a fuel tax hasn't gotten a generous reception in the U.S. or in some other countries. And she also noted that tax reform doesn't necessarily mean a tax increase ("smarter taxes" was the buzzword for the potential to offset taxes elsewhere).