One way to encourage energy conservation is to eliminate government subsidies that keep energy prices artificially low. When prices reflect the true costs of energy, including the environmental coats incurred by its production, transport, and use, en­ergy will be used more efficiently. Gas­oline prices in the United States do not reflect the true cost of gasoline and are unrealistically low. During the late 1980s, for example, Europeans paid three to four times more for gasoline than Ameri­cans did. It has been demonstrated many times that the price of gasoline affects the level of gasoline consumption: lower prices encour­age greater consumption. Over the next few years, a more realistic price for gasoline should be intro­duced to encourage people to buy fuel-efficient au­tomobiles, carpool, and use public transportation.

    Other gasoline-conserving measures could be adopted, such as reinstating the 55-mile-per-hour speed limit in areas where the limit is now 60 or 65

mph. Automobile fuel efficiency is cut by approxi­mately 30 percent if a car is driven at 65 mph rather than 55 mph. In addition, federal financial support for transportation could be shifted from highway construction to public transportation. We say more about energy conservation in Chapter 12 {see also You Can Make a Difference: Getting around Town).

2. Secure Future Energy Supplies

A comprehen­sive national energy strategy will probably include the environmentally sound and responsible devel­opment of domestically produced fossil fuels, espe­cially natural gas.

    There are two types of opposition to this ele­ment of a national energy strategy; one is economic and the other is environmental. Some think it is better to deplete foreign oil reserves while prices are reasonable and save domestic supplies for the future. Most economists argue against this view, however, because of the United States trade deficit; we do not currently finance our oil imports by ex­porting goods and services of equal value. Many environmentalists oppose the development and increased use of domestic fossil fuels, largely due to the environmental problems already discussed.

    Everyone, environmentalists included, recog­nizes the need for dependable energy supplies. Securing a future energy supply is a temporary solution, however, because fossil fuels are nonrenewable resources that will eventually be depleted, regardless of how efficient our use or how much we conserve. Having a secure energy supply for the short term will, however, allow us time to develop alternative energy sources for the long term.

3. Improve Energy Technology

Research and de­velopment must be expanded for all possible alter­natives to fossil fuels, especially renewable energy sources such as solar and wind energy. Our long-term energy policy goal should be to shift to energy sources that do not threaten the environment.

    Who should pay for the research costs of im­proving energy conservation and developing alter­native forms of energy? The answer is that we all should share in these costs because we will all share in the benefits. The proceeds of a gasoline tax are being considered as a means of financing programs

to achieve the goals in steps 1 through 3. Some policy makers have suggested $ tax of as much as 50 cents per gallon. This may sound excessive until U.S. gasoline prices are compared with those in Japan and Europe—which are much higher. More expensive gasoline doesn't seem to have hampered Japan’s or Europe's economic competitiveness.

4. Accomplish the First Three Objectives without Further Damaging the Environment

The environmental costs of using a particular energy must be weighed against us benefits when it is con­sidered as a practical component of an energy pol­icy. If domestic supplies of fossil fuels are developed with as much attention to the environment as pos­sible, they will not only help reduce our depend­ence on foreign oil, but also give us time to develop alternative forms of energy. One suggestion has been to add a 5-cent tax on each barrel of domes­tically produced oil to establish a reclamation fund for undoing some of the environmental damage caused by mining and production of fossil fuels.