Gas Emissions Market

Tim Haab over at Environmental Economics proposes a method for reducing fossil fuel consumption that sidesteps the drawbacks of a gas tax. He proposes a consumer gasoline allowance market, with supply capped at today’s consumption and reduced over time. Want a drive a Hummer? No problem, you’ll just have to pay more to buy up gas credits from people who are driving Priuses (Prii?). It’s probably no more palatable to America’s drivers than a gas tax, but it has the potential to be more fair.