October 12, 2008 | | Comments 112

Green Fee Needed Now

Impose higher federal and or state gasoline taxes now.  Ok, I said it.  Call it a ‘Green Fee’ if you want.  Call it anything you want, but provide funds to continue the recent progress toward a greener economy.

Some background and assumptions which I used in recommending this;


The federal gas tax has been in place since 1932.  Contrary to popular belief, all monies do not go to highways or infrastructure, in fact that didn’t even start until the 50’s, prior to that it was used to fund wars.  Since 1980 the tax has increased dramatically from 4cents to 18cents per gallon.  Yet, we still have a call from Obama and congress for Infrastructure spending for roads, bridges and the like.  What have you been doing with the money Congress? Another post on that topic.

Starting in 1919 with Oregon, states started to get on the bandwagon with this new tax approach.  All states have some type of tax, whether it is a gas tax, sales tax, or excise tax (call it what you want) on gasoline.  Here is a map with all states combined taxes on gasoline from

On average around 40cents per gallon and $281 per person per year.


  1. The US economy and consumers can handle a gasoline price of $3.50 per gallon without substantial economic slowdown
  2. The price of Gasoline will fall below $3 per gallon by the end of the year.
  3. Funding of green initiatives from both candidates will be delayed due to funding for the economic crisis and the continued war
  4. The government, federal and state, has limited spending discipline with gas tax revenue
  5. Higher retail gas prices encourage a ‘green consumer’


Impose a scaling green fee on gasoline prices. The fee would scale with the underlying per barrel of oil price.  As oil prices fall the fee increases, as it increases the fee would decrease.  The intent is to maintain a retail price around $3.50 per gallon.  The federal government would collect the fee.

Pay the Federal government a processing fee of 10% for collecting and enforcing the collections.

On a quarterly basis, the federal government will distribute the funds to an agreed upon ‘Green Investment Council’, which is managed by US Venture Capitalist firms.  Investments are made by this council in ‘green’ technologies and companies that meet the specific goals of alternative energy production, job creation, and investment return.  The overriding goal is investment return as it is with most Venture capitalists.

At no time will these fee funds take a majority position in any company, all use of these funds need to be along side private investment and will be non-voting shares.  Funds will be managed similar to the way investment funds are managed now. Contributors buy into an investment fund, expecting a return.  The revenues from this fee will be treated the same.  Congress will sit at the table as the investor.

In this way the Government is directly investing the fee from consumers in ‘Green Technology’, not funding wars or social security or corporate greed, or whatever they have been spending money on lately.  It is similar to a charity that can prove that the monies go directly to the recipient and not to the bureaucracy.  I would rather give money to those charities.

If ideas such as the Cash for clunkers

or Conservation Corps

or Incent to Invent

have any standing they will need to prove themselves to the ‘Green Investment Council’


At current prices of $3.29 we are talking about a 20cent fee, which would equate to around $25 billion annually in the investment fund.  If the gas price actually reflects the falling oil price then we would double the investment amount per year to $50 billion.  This money, in the right hands, and please understand, Congress is not the right hands, would go a long way in funding businesses that can meet the environmental objectives, provide jobs and get the job done quicker than any government run program.

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