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One is that consumers won’t directly see the fuel economy savings—all such savings are relative to a future that doesn’t happen—the “contrapositive” case. Thus they may not realize how much they are saving; but they will very likely notice the direct vehicle tax they are paying in the above scenario. per liter ($0.26/gallon
The University of California demand study was conducted by researchers from the UC Institute of Transportation Studies , a network with branches at UC Davis, UC Berkeley, UC Irvine, and UCLA. —Dan Sperling, director of the UC Davis Institute of Transportation Studies. Transportation pricing: Gasoline taxes.
In addition, although many experts say that the solution to our energy and climate problems is sending the correct price signals to industry and consumers, the transport sector’s behavior is highly inelastic in that it does not change significantly in response to changes in fuel prices, at least in the range that is politically acceptable.
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