Chasing the Dream of Half-Price Gasoline from Natural Gas

The Trump administration recently scaled back fuel efficiency standards for automobiles, which are meant to reduce gasoline consumption and speed the shift to electric vehicles. Economists have disputed the calculations behind this decision, including Christopher Knittel (MIT Sloan), who said, “If you do the analysis right, we found that revoking these standards does not save consumers money.”

Writing for WBUR, Christopher Knittel (MIT Sloan) argues that a vehicle miles traveled tax would be the best substitute for federal gas taxes in order to account for the rise in electric vehicles—and other more fuel-efficient cars—and prevent the erosion of the transportation sector’s revenue base.