Whew! Gas prices are back down nationwide, to levels not seen in years. Most people are rejoicing, since the last thing they feel they need in uncertain times is to be sending their hard-earned money to oil companies who are already producing record profits.
But the fact is, we probably weren’t paying enough for gasoline even at its highest levels, because we weren’t paying the full costs of producing and using it. [See this great post for economics students for more details]. Full-cost pricing for gasoline would include not just the extraction and transport costs of crude oil, the costs of refining and shipping gasoline, and the costs of distributing it through a retail network to your local gas station. Full-cost pricing would mean paying the full social costs of gasoline, the private costs and the public costs imposed on others, including in the price of gasoline the impacts of pollution on human health, the damage mining and shipping does to the ecosystems that provide economic benefits to people, and the cost we impose on future generations by using up non-renewable resources….
