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Tough Energy Legislation Needed as Prices Soar

New laws should address long-term energy concerns–even if they lead to higher energy prices.
November 13, 2007

As gas prices soar, it may get more difficult for Congress to enact the sort of legislation that can address long-term energy and climate concerns. As oil prices continue to flirt with the $100 mark, the government warns that gas prices will increase for the holidays, and the New York Times reports that some analysts expect $4 a gallon of gas by spring. The same report suggests that lawmakers are feeling pressure to pass some sort of energy legislation before the year is out. (Separate energy bills were passed by both houses earlier this year, but differences between them and veto threats have stalled the legislation.) In response to this pressure, a scaled-down version of the energy legislation might be passed.

If such a law does something to cut fuel prices in the short term, it may do more harm than good. Instead, legislators should focus on long-term solutions, including requirements for higher fuel efficiency and the use of renewable energy sources. Last week, the International Energy Agency issued a bleak report urging efficiency measures in light of possible supply crunches in coming years. While such measures could improve prices in the long term, in the near term, they would likely increase costs to consumers as utilities use more-expensive sources of electricity, and automakers add fuel-saving technologies to vehicles.

But higher costs may be just what’s necessary to urge consumers to make choices that decrease dependence on fossil fuels, compelling them to switch to more-efficient lightbulbs, appliances, and vehicles. One problem is that those who will be most affected by high energy prices–the poor–are also the people least able to afford new, efficient technology. Legislation that leads to increased energy prices but is coupled with subsidies for more-efficient technology could do the most good in the long term.

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