I have my doubts about the effectiveness of a gas tax in improving efficiency. I’ve been comparing VMT and gasoline consumption with inflation adjusted price. Fuel efficiency goes down with higher prices.

Even if it is revenue neutral, some inefficiencies need to be ironed out for it to be economically beneficial. We’re wasting more fuel than before, that’s part of why the economy is down. People don’t respond well to excessive penalties, just like excessive rewards. An extreme example is Learned Helplessness.

1.People are at their limit of how much driving they will tolerate. This means we get giffen behavior when gas prices increase. People spend more time driving for work, when there’s lots of traffic, just to get ends to meet, and shift driving away from less congested times.

2. People have big misconceptions about what is efficient. Driving slower saves fuel, when you’re driving above 55mph. Below 40mph, driving faster is more efficient. Accelerating faster is about the same, or slightly more efficient, than accelerating slowly. Typical car engines don’t see efficiency drop off until after 3000rpms.

3. Tragedy of the commons. About the most fuel efficient behavior you could adopt is avoiding braking. However, if you do this during congestion, you prevent cars from clearing into your queue and create more bottlenecks. Starting from a stop is the big gas waster. A stop can take 6 times more fuel than a rolling stop.

4. Unfortunately, when times are lean (which happens when gas prices are high) people return to more conservative dress and traditional work hours to compete for jobs. This may lead to more congestion.

Gas demand is inelastic in the short term, but I think this is because it is the most basic input of economic activity. It takes a long time for the effects to ripple out to the point that prices rise and incomes fall and people stop working and investing.