Pump It Up

We like to complain about gas prices. We also like to drive. On Earth Day Eve, we ought to recognize both that gas prices will continue to go up, and that we will continue to drive just as much as before.

By bringing environmentalists into the reality-based community, we can help them refocus their goals to support better-engineered cars that burn cleaner fuels.

Last week, Attorney General Rob McKenna released a report finding no market manipulation in setting gas prices in Washington. Today, Senator Maria Cantwell and Representative Jay Inslee are sending a letter to President Bush, asking for a federal look at gas market manipulation. Meanwhile, the Sightline Institute released a report finding that the Northwest has cut back on gasoline usage by nearly a gallon a week since 1999. That’s right, a whole gallon.

Here's the reality. M.I.T. Behavioral economist Dan Ariely notes that if gas prices were to double tomorrow, there would be some initial shock, but the effect on demand would turn out to be minimal – we would adjust to the new gas prices just like we’ve adjusted to the high cost of sneakers, Starbucks and bottled water. An adjustment to higher prices would be even faster and easier if it was linked to a new type of fuel, like biodiesel or ethanol.

Armed with this information, we can make better decisions about how we react to the gasoline market. Stop wasting time either complaining about prices or arguing that higher prices will curb demand. Instead, allow higher prices to reflect true costs, and focus on cleaner fuels for better cars.