247 



If environmental prevention is to prevail over environmental cure 

 and if the United States is to remain an international industrial leader, 

 our country- must rapidly develop and deploy a wide array of new, 

 more efficient, and environmentally safe technologies. This need for 

 newr technology is particularly acute in the realms of transportation and 

 energy generation because these activities currently account for so 

 much environmental degradation. 



Simply put, there must be a deep-seated change in how our coun- 

 try produces and uses energy. No single area of activity is so closely 

 interwoven with the environment. Were it not for the worlds large 

 reliance on fossil fuels for both energy production and transportation, 

 the problems of global warming, acid rain, and urban smog would be 

 relatively minor. A progressive shift away from fossil ftiels as quickly as 

 possible in both the energy and transportation sectors is crucial. 

 Because the United States uses in excess of one-fourth of the world s 

 energy, largely generated by fossil fuels, it must be a leader in develop- 

 ing other energy sources. 



Economic incentives dramatically different from those now in 

 force are required. Coal, oil, and gas prices, for instance, must reflect the 

 environmental costs associated with their combustion. Over the long 

 term, the United States must shift to alternative nonpoliuting sources of 

 energy, principally from renewable sources. In the interim, the country 

 must develop technologies that use energy more efficiently and thereby 

 consume less fuel. A federal carbon tax should be phased in to move the 

 economy in this direction and away from reliance on fossil fuels. 



In transportation, the long-range need is a shift in auto technolo- 

 gy to alternative sources of energy that will pollute our cities less. This 

 will require incentives for more fuel-efficient autos and for fewer miles 

 driven, as well as for new technologies such as electricity and, in the 

 longer term, hydrogen. To curb current pollution levels, the federal 

 gasoline tax should be raised gradually and predictably over several 

 years — for example, by about $0.20 each year for five years. We believe 

 that only an increase of this magnitude will work to change driving 

 patterns and technological development. Even with this tax, the cost of 

 gasoline in the United States would remain about the same price (in 

 constant dollars) as the cost of premium gas here in 1981. Because of 

 the potentially regressive impact of gasoline taxes, a system of tax cred- 

 its or rebates could be used to oflset hardships. 



XVI ClKMtMNi; A .SlISI AINAHir. I-IMUHK 



