“I think its a little inconsistent to criticize government solutions, the market solution and potential institutional solutions (such as PPP’s) ultimately their are issues no matter what solution we choose to a specific externality, we just have to weigh up the costs and the benefits and choose the best one.”

I’m not criticizing the solutions per se. I’m criticizing how they’ve been implemented.
I don’t trust our pollies/beauracrats not to make the same mistakes as made by others re. PPP. For a good example, care of the Labour government see the deal they’ve made with Fulton Hogan. http://blog.greens.org.nz/index.php/2007/03/21/an-open-cheque-book-to-fulton-hogan/

“Now, the fundamental question in the post was, do you think we should pay more fuel tax.”

No, I think it would be pointless to expect road users to pay even more tax on top of what they already pay in order to pay for “environmental/health externalities” and covenience of other road users. As I said before its in effect a tax on the less wealthy to pay for the convenience of their wealthier fellow road users.

A better route to go is. a)regulate the fuel companies to produce cleaner petrol. It has worked in Sweden and it worked here regarding leaded petrol didn’t it? b)apply more stringent pollution requirements on car emmissions and get the offending vehicles off the road c) provide viable alternatives for people to use that would be just as convenient as cars d) ensure that our leaders show far more foresight and wisdom in their future city planning decisions.

Now, the fundamental question in the post was, do you think we should pay more fuel tax? I think that was relatively straightforward. I’m stating here that a fuel tax makes sense for solving environmental and health related externalities from fuel consumption.

If you want to talk about congestion instead, the solution is toll roads, make people who want to take a car to work pay for the lost productivity of all the people they are holding up.

“Receivership light at tunnel’s end.”
http://www.smh.com.au/news/business/receivership-light-at-tunnels-end/2006/11/16/1163266711907.html

I think that we are debating at cross purposes.
Perhaps we are, but any debate whether on topic or not is only healthy as it stimulates sharing of points of view and opening up your view to challenge your arguments is only beneficial in putting your methedology and logic up to scrutiny.
http://economistsview.typepad.com/economistsview/2007/04/the_benefits_of.html

In all honesty I wasn’t quite sure what “incosistency” I was originally supposed to be debating as the original comment was pretty vague.

“I don’t see how government incompetence comes into it.”
Because due to government short-sightedness and incompetence we’ve increasingly become more dependant on cars. See the above links.

“A government that understand the importance of the market can do a lot to further the development of a country, focusing on mistakes that have been made doesn’t help improve outcomes.”

The market is very good in some circumstances, but PPPs are just asking for manipulation, exploitation, and corruption. Look at the Sydney Cross City Tunnel in Australia.

http://wsws.org/articles/2005/oct2005/tunn-o21.shtml

http://www.smh.com.au/news/national/wrong-method-costing-state-billions-report/2005/10/26/1130302838987.html

http://www.notolls.org.uk/oct05news.htm

http://www.smh.com.au/news/editorial/light-at-the-end-of-the-tunnel/2005/10/21/1129775957104.html

Now the original point of this post was to say that the UK should not have higher petrol taxes, as that would be a case of government failure since the tax already covers the externality effect of driving. However, in NZ our fuel tax is a lot lower, and so does not cover the size of the externality and should be increased.

Now I fully agree with you that education is a useful tool, however there is scope for fuel taxes and education on fuel efficiency to work in tandem.

Also to the addendum, why should consumers bear the cost of government incompetence? As we are talking about externalities, I don’t see how government incompetence comes into it. Ultimately if we want to solve congestion, we form private-public partnerships where roads are leased out and private sector firms change tolls. A government that understand the importance of the market can do a lot to further the development of a country, focusing on mistakes that have been made doesn’t help improve outcomes.

“Does Russell’s (co-leader of Greens) statement mean the Greens are the first party to admit that the utopian quarter acre sections policy of Seddon and most subsequent governments is the root cause of most of New Zealand’s woes? Especially our car dependence and ridiculous urban land prices. After all, not allowing sensible section sizes during the first three-quarters of the 1900s meant New Zealanders were denied the choice of living in anything other than low density suburbs, a feat that even Los Angeles wasn’t stupid enough to try. So its not really surprising that Auckland has much worse traffic congestion than L.A. and even less likelyhood of ever solving it.”

http://blog.greens.org.nz/index.php/2007/06/22/stabilising-the-housing-market/
http://www.oilcrash.com/articles/auck_iss.htm

Thats assuming that they a) hurts them sufficiently enough to change their behaviour or b) don’t just get angry and demand the fools who implemented the tax to dismantle it. Just look at the outcry of Aucklander’s after the call to charge an extra 5 cents on the fuel tax in Auckland, which would all be spent on public transport.

No one least of all the middle classes like pollies or beauracrats telling them what is or isn’t good for them. It never ceases to amaze me that Labour or my Party leadership hasn’t wised up to this yet (Greens, may suprise you).

Petrol prices are going to increase in the future anyway particularly when our dollar drops, which it inevitably will, so I don’t see a point in implementing yet another unnecessarily punitive tax.

“The most efficient way to deal with that is to get people to pay the full social cost of their action. It is the same with ciggaretes, they hurt other people, they take up a larger amount of a ‘poor’ persons income, yet it is still fair to tax that.”

The old tabacco tax argument. Its been demonstrated in various studies that the revenues collected from tabacco taxes far exceed any externalities that result from smoking. Its just a cynical and transparent revenue generating exercise by the government and environmental taxes will no doubt be any better. http://www.cato.org/pubs/regulation/reg20n3c.html

I think that anti-smoking and environmental lobbyists over estimate the power that punitive taxation has to change peoples behaviour. I believe a better tactic would be generally better awareness and education regarding the costs of their behaviour, regulation of the production activities of the energy/tobacco industries, and the provision of superior alternatives.

http://www.ash.org.uk/html/regulation/html/additives.html
“When the Swedish CO2 taxes were first introduced in January 1991, their rates varied according to the average carbon content of different fossil fuel types, but they were applied equally across “basic” users (households and non-manufacturing industries) and industries (mining, manufacturing and horticulture.”
http://www.iisd.org/greenbud/sweden.htm

Now, I take a bus everywhere, that is fine for me since I live in Wellington and there is lots of buses. If petrol was taxed, then the bus service in other regions could be improved so that it acted as a substitute to taking a car. Of course if people have to give up cars they have to sacrifice something, but I don’t agree with the term need, it is too absolute and doesn’t apply to much apart from the necessities of life. As the necessities of life are still avaliable when you take a bus, it doesn’t impact on a persons needs.

I don’t think we should rebate the poor either as it is unnecessary. However, I don’t think a coupon system that was given out with the benefit would lead to a large increase in public servant numbers. The coupon thing was an example, for people who seem to think society is out to bully the poor.

Now, i’m not saying that people should be paying more for petrol for convenience, I want people to pay for the environment and health costs they have on society. The most efficient way to deal with that is to get people to pay the full social cost of their action. It is the same with ciggaretes, they hurt other people, they take up a larger amount of a ‘poor’ persons income, yet it is still fair to tax that.

Since carbon emissions depend on the amount of fuel you consume, I don’t think it would be an administrative nightmare to put a per litre tax on petrol, all it involves is increasing a number that the government already admisters. Like I said earlier, a petrol tax is very different to income tax. The ultimate goal is to make a petrol tax ‘revenue neutral’ so that all the money that comes in is invested back to solve for the externality, in this case by paying off liabilities from the Kyoto protocol, funding improvments in public transport etc.