Damaged surfaces, road works and traffic jams at long familiar bottlenecks continue to dominate the picture. Investment in roads is not keeping up with need. In recent years, federal, state and local governments have invested only a quarter of their revenues from taxes and levies on motorists in the road network.
Despite the growth in traffic, carbon dioxide emissions from road vehicles have recently fallen below the 1990 level. Technical progress has lowered the average fuel consumption of motor vehicles considerably. Changing the basis of road tax from engine capacity to carbon dioxide emissions will promote this development. By contrast, the European Commission’s CO2 limit for new cars makes less sense. Nor are regulations making the addition of organic fuels compulsory an effective way of curbing emissions of the greenhouse gas.
Instead of prescribing in detail how vehicles’ CO2 emissions are to be reduced by technical means, the emission of CO2 itself should be taxed. Motorists could then decide for themselves how to respond: by buying thriftier cars, driving less or making alternative savings.