Okay, how about a user fee for driving?

Over at Environmental Economics, author Tim Haab has an evaluation of a usage fee for automobiles based on mileage and fuel economy. His proposal is to charge vehicle owners the inverse of their EPA city fuel economy per mile driven. The fee would penalize owners with larger and less fuel efficient vehicles, as well as having people pay a fair price for their road use.

So consider two car types: a gas guzzler (GG) and a fuel efficient car (FE). Suppose the gas guzzler has an EPA MPG rating of 15 mpg city and the FE car has a rating of 35 mpg city. The per mile fuel efficiency payment for the gas guzzler will be $0.067 per mile drive (1/15) and the per mile fuel efficiency payment for the fuel efficient car will be $0.029 per mile driven. If a driver of each type of car drives 12,000 miles a year, the GG driver will pay an annual fee of $804, and the FE driver will pay an annual fee of $348.

Seems reasonable, eh? This proposal even comes from a self-confessed SUV driver. On the political probability side of the coin, making this a usage fee may make it more appealing to anti-tax crusaders. Of course, this proposal requires a system of inspection stations to mark down annual mileage and assess the fee. So is there a less bureaucratic solution? Yes.

I'd like to point out that the fuel efficiency payment is algebraically identical to a $1/gallon GAS TAX** that many economics [sic] including John and me think would go a long way toward solving many of the transportation related externalities.

**Multiplying the FEE=$(1/(miles/gallon)) by miles driven gives $Fee*miles=$1/gallon.

In other words, if we want to encourage use of fuel efficient vehicles and charge drivers for their use of the road, raise the gas tax. It's the free market, stupid.