Speculation that gas prices might hit $4 a gallon this summer prompted me to go back and look more closely at a recently published paper by researchers at U.C. Davis' Institute of Transportation Studies arguing that U.S. drivers are no longer significantly adjusting their driving habits in response to the rising cost of fuel. Back in the day, drivers drove less when gas prices spiked. No longer -- in fact, the latest data from the Department of Energy show that American drivers are driving more.
This is both depressing, from a conservation standpoint, and intuitively perplexing. I am sure that I am not alone in having paid record amounts to fill up my gas tank over the last year. I suppose it's impossible to write as much about environmental issues as I do and not think about the pernicious impact of driving, but still, there's little doubt in my mind that paying $60 dollars to fill up a tank instead of $40 has changed my behavior.
The Davis researchers pose a number of explanations: changes in land use, by which they mean a higher proportion of people live in the suburbs now than did so 20 years ago, and increased fleet fuel efficiency, which paradoxically implies that any decrease in miles driven makes a relatively smaller dent in the statistics because less fuel is being consumed.
But there's no consideration of psychological factors.
Could this be a case of the oil shock that cried wolf? The oil shocks of the late '70s coincided with the mainstream debut of the environmental movement. The two phenomena sent messages to the general public that reinforced each other. Conservation: good for the world and good for your pocketbook.
But what happened next? Oil companies desperate to break the stranglehold of OPEC spent billions of dollars developing new sources of supply and the price of a barrel of crude went on a sustained decline. At the same time, the environmental movement quickly became a toxic political football. The messages sent by these phenomena reinforced an entirely different conclusion. First, there was no real reason to worry about fossil fuel shortages, since the magic of the price mechanism would fix any such problem, just as it did in the 1980s; and second, conservation was something only business-hating hippie left-wingers cared about. What a relief! Not only is buying an F350 a sound investment, but patriotic, also!
The conclusion drawn by the researchers from their number-crunching is that to really change driving behavior would require a gasoline tax so great as to be politically impossible to enact. Therefore, politicians should focus on improving fuel economy standards instead. But that ignores the possibility of another change in the narrative, another tipping point. Maybe it's not $4 a gallon gasoline, maybe it's $5. Or $6. Maybe it's a couple more killer hurricanes or a devastating heat wave. The lesson of history should not be that drivers no longer respond to price signals; it should be that they changed their behavior once, and they can just as easily do so again.