Press Release Environment United States

Cut Gas Price Inflation: Six Climate-Friendly Alternatives to the Gas Tax Holiday

April 22, 2022

Contact: KL Conner, 202-281-4159Mail_Outline

Washington — With war in Ukraine driving up gas prices, it’s important to resist the temptation of gas tax holidays. This Earth Day, researchers Algernon Austin* and Phineas Baxandall* present six alternative policies lawmakers can implement to address high gas prices without fanning the flames of climate change.

In Earth Day is a Time to Consider Better Responses to High Gas Prices: Free Public Transit and Other Ideas, coauthors Austin and Baxandall describe how implementing these policies can equitably reduce long-term greenhouse gas emissions while also soothing the pain of short-term soaring gas prices.

“Climate change and the war in Ukraine underscore how America depends too much on gasoline,” said Baxandall. “Lawmakers have the tools to help overcome these problems. They shouldn’t jump onto gas tax cuts that provide a windfall to oil companies and worsen the problem in the long term.”

“Gas taxes fund transportation infrastructure. Gas tax holidays take a bite out of much needed investment in our crumbling infrastructure that disproportionately burdens low-income people and people of color,” said Austin. “Policy makers should uncouple the funding structure to allow for robust investment in climate-friendly transportation infrastructure without guzzling more gas.”

Make Public Transit Free: The more people use public transit, the less gasoline they consume. Making it easier and more convenient for people to travel by train and bus helps commuters save money on gasoline and cut their greenhouse gas emissions.

Tell Drivers They’d Save Money by Driving the Speed Limit: The faster a person drives over 50 miles per hour (MPG), the more gasoline their vehicle burns to cover the same distance. Policy makers should educate the public about how speeding makes their commute more expensive. 

Encourage Remote Work: Eliminating commutes can save on transportation costs and help to put some downward pressure on gasoline prices. Not everyone can do their work remotely. But for those who can, more remote work means less demand for gas.

Encourage Shorter Work Weeks: Four slightly longer workdays can be equal to a five-day workweek, and eliminate a drive to and from work. 

Encourage Electric Vehicles and Charging: Policy makers need to make sure that electric vehicles and charging stations are made accessible for low-income communities so the benefits to household budgets extend beyond more affluent families.

Pay People Not to Drive: Along with free public transit, policy makers should explore the best mechanism to provide direct household relief to encourage less driving. 

To sum up, gas tax holidays take money away from badly needed infrastructure investments and largely transfer that money to oil companies, distributors, and the wealthy. Also, they slow down the transition away from gasoline-powered travel, which is necessary to achieve our climate-change goals. 

*Both coauthors are available for interviews:

Algernon Austin is Director for Race and Economic Justice at the Center for Economic and Policy Research (CEPR).

Phineas Baxandall is Senior Analyst and Advocacy Director for the Massachusetts Budget and Policy Center.

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