by Julian Darley

Here’s an interesting question: if you gaze for a moment at this fine piece of Delphic art, which plots U.S. VMT (Vehicle Miles Traveled) with gasoline price for this decade:


Would your first thought be, “Hmm, I wonder how we are going to pay for building new highways since our gas tax revenues must be falling, because we are driving less,” or would it be: “Goodness me! It looks like my fellow Americans are driving less, which as it turns out is exactly what I am doing, because gasoline prices have shot up so much! Maybe we don’t need to build any new roads.”

If you happen to be Mary E. Peters, US Secretary of Transportation, then you fall into the first camp. If you happen to be just about anyone else, you may already have joined the second camp.

But Secretary Peters doesn’t want to hear any nonsense about restraining road building: “By driving less and using more fuel-efficient vehicles, Americans are showing us that the highways of tomorrow cannot be supported solely by the federal gas tax. We must embrace more sustainable funding sources for highways and bridges through more effective ways such as congestion pricing and private activity bonds.” I hope Americans feel duly chastised for driving less. Anyway, let’s be clear: under no circumstances should we raise the gas tax from its current wallet-bending 18.4 cents a gallon to anything approaching the stratospheric levels the benighted Europeans pay (in England, they have been paying up to $10 a gallon, much of which is tax).

Is this complaint that we need alternatives to fuel taxes just a conservative government showing its usual aversion to taxes as a policy instrument? Will climate campaigners favoring greater fossil fuel taxes be better off after the US regime change (be it McCain or Obama)? Not necessarily. There have been riots and protests across the world against increasing fuel and power prices, including in Europe. In South Africa, land of cheap electricity and abundant coal, a huge strike against rising energy costs is about to take place. All this reminds political advisers in every nation, rich or poor, that higher energy prices are a sure-fire vote loser, and yet almost everybody who wants renewable energy and less CO2 emissions sees that higher prices are just about the only way to get these things to happen.

Meanwhile, one of the intriguing things that the VMT graph suggests is that Americans did not suddenly start driving less when gas hit $4. Rather, the pattern actually began to change when gasoline price started closing in on $2. This at least correlates with (and may be the major cause of) the relentless VMT rise becoming a plateau, which lasted well over a year. Then at the beginning of 2008, after a period of unprecedented price volatility, for the first time in decades, VMT started falling.

Does this mean we have seen peak VMT? Too early to tell, but either way, this fall in VMT is highly significant, and should cause transport planners all over America to pause and think very carefully before committing any more funds to new road building, lest we produce more of the magnificent roads to nowhere we saw in 1920s Florida.

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