Gas prices have edged up over the past month, passing $2 a gallon in Seattle earlier this week as an east-coast cold snap pushed up crude oil prices.

But no matter how high the market price goes, gas (and driving in general) is still too cheap.

  • See, for example, the chart below, from the Victoria Transport Policy Institute (from page 6-4 of this pdf).  Much of the cost of driving a mile—costs for air pollution, noise, congestion, and the like—are "external costs", meaning that they aren’t paid by the driver, but by other people.  [Click on the graph to enlarge it]

    The chart above doesn’t even account for major categories of external costs—such as the cost of securing petroleum supplies.  Estimates from the mid-1990s (cited in this pdf document also from VTPI) put the United States’ economic and military costs (never mind the human costs) for securing access to Mideast petroleum at somewhere between $6 and $60 billion annually.  Surely those costs have gone up substantially in the wake of 9/11.

    Of course, if drivers had to pay for all those "external" costs—either as taxes on gasoline or on miles driven—they’d drive less.  But until those costs are internalized, people who drive (myself included) are enjoying a free ride.