EclectEcon

From yesterday's London Free Press (aka "the Freeps"),

Mayors of Ontario's automotive cities are rallying to fight a recently announced tax on gas guzzlers they say will "decimate" the province's auto industry. ... Mayors from 13 Southern Ontario cities met in Woodstock to talk about how to help the province's auto industry.

... "This could decimate an entire industry," said Woodstock Mayor Michael Harding, who will co-chair a committee opposing the tax with Gray.

... The mayors oppose penalizing large fuel users, fearing Ontario will move toward adopting California standards for vehicles that, by 2012, would mean Ontarians would not be able to buy cars assembled here, Harding said.

... In its budget, Ottawa said some large gas users will be hit with a tax of up to $4,000, hurting primarily the traditional Big Three. Buyers of fuel-efficient vehicles will receive rebates of up to $2,000.

New cars contribute to only only one per cent of greenhouse gas emissions, yet the largest contributors, fossil fuel burned for electricity and the Alberta tar sands project, were ignored in the budget, the mayors point out.

... The only automaker to speak in favour of the federal government policy is Toyota, the company building a new assembly plant in Woodstock that will employ 2,000. Despite the fact Harding's hometown manufacturer supports the policy, it is still bad for the industry, he said.

"I appreciate that Toyota is green, but the Big Three are still the largest employers of auto workers. We cannot, as an industry, favour one automaker over another."

I had two reactions to this article:

• It seems like a clear case of NIMBY [Not In My Back Yard]. The mayors might all be in favour of reducing pollution or reducing carbon dioxide emissions, but at the same time they want policies that do not affect their constituents so directly.
• If, indeed, burning carbon fuels is so horrible, why tax the vehicles??? Why not just tax the fuel purchases directly (and reduce other taxes, so the programme would be revenue-neutral)? Then, if people want to burn a lot of fuel, they would be individually paying high taxes to do so. People who drive small cars a lot would be paying for all the negative externalities they generate, and people who drive humongous SUVs very little would be causing less total pollution and could easily end up paying less in total taxes, too.
  
  Taxing the vehicles is such an indirect way of doing this, involving ham-fisted taxes, when fuel taxes would be tied much more directly to the use of carbon-based fuels.

So while I am not at all thrilled with the mayors' position that the federal gubmnt shouldn't pursue policies that might hurt the auto industry, I agree that there is a better, more efficient way to pursue the same goal. I'm guessing the mayors' reactions to a big fuel tax would be less negative than would the reaction from the oil patch, even though it might have a similar (though smaller) effect on the demand for gas guzzlers. One reason is that it would appear to be a tax on oil, not on SUV manufacturers; another is that it would tax all fuel users according to how much fuel they use and would not be directed only to the purchasers and suppliers of gas guzzlers.