As the price of oil reaches record lows, President Obama has announced a new plan that would tax oil to pay for the latest in renewable transportation technologies. The $10 per barrel fee would raise more than $300 billion, and would target developments in mass transit, rail, and self-driving vehicles. Albeit a federal program, the new policy would have significant effects on local communities and cities.
One of the greatest challenges for mayors is finding the funds in already tight city budgets to invest in renewable technologies, even when long term planning would save their city money. The influx of federal dollars could help alleviate these difficulties, however, quick action by the federal government seems unlikely.
With a divided congress, the passage of the President’s plan will prove difficult, yet mayors may still use this announcement as an opportunity. Community and city leaders can take the Obama Administration’s announcement and use it as a springboard for climate discourse with residents. Identifying areas where climate action can be undertaken, and targeting attractive solutions should begin today, and an announcement of a new federal program may provide a needed spark for communities to converse about climate action.
An oil fee at the federal level could transform the transportation industry throughout the country. Mayors should work with federal and state officials to this end, but also begin to boldly act in their communities. Get to work on climate solutions in your city by joining Path to Positive Communities today!
President Barack Obama is about to unveil an ambitious plan for a “21st century clean transportation system.” And he hopes to fund it with a tax on oil.
Obama aides told POLITICO that when he releases his final budget request next week, the president will propose more than $300 billion worth of investments over the next decade in mass transit, high-speed rail, self-driving cars, and other transportation approaches designed to reduce carbon emissions and congestion. To pay for it all, Obama will call for a $10 “fee” on every barrel of oil, a surcharge that would be paid by oil companies but would presumably be passed along to consumers.
There is no real chance that the Republican-controlled Congress will embrace Obama’s grand vision of climate-friendly mobility in an election year—especially after passing a long-stalled bipartisan highway bill just last year—and his aides acknowledge it’s mostly an effort to jump-start a conversation about the future of transportation. But by raising the specter of new taxes on fossil fuels, it could create a political quandary for Democrats. The fee could add as much as 25 cents a gallon to the cost of gasoline, and even with petroleum prices at historic lows, the proposal could be particularly awkward for Hillary Clinton, who has embraced most of Obama’s policies but has also vowed to oppose any tax hikes on families earning less than $250,000 a year.
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