Why a carbon tax makes sense for the auto industry

General Motors argues that when you measure carbon emissions on an oil-well-to-wheel basis, electric vehicles have a larger footprint than gasoline or diesel vehicles.

Karl Stracke, GM's vice president of global vehicle engineering, says consumers need to be educated about the real carbon implications of the electrification of vehicles. He's hinting that electric vehicles are not a wise environmental choice.

But whenever I hear an auto person say consumers need to be educated about this or that, I roll my eyes. It's another way of saying consumers are stupid because they aren't doing what we think they should or because they don't buy what we're selling.

I don't think consumers are stupid. But I also think the best, most effective way to educate consumers about changes in technologies is through their wallets. So it's time for a carbon tax.

Think about it. If America replaced its patchwork of federal and state fuel taxes with a standardized carbon tax, then the real carbon footprint of each technology -- electrics, hybrids, diesel, gasoline, compressed natural gas -- would be transparent to the consumer.

Auto executives like to grouse that the U.S. government is favoring one technology over the other. But that's nothing new. Every automotive market in the world is shaped by government tax policies.

Diesels are half the market in Europe because taxes there favor diesel over gasoline. Diesels are a sliver of the U.S. market because taxes here favor gasoline over diesel. Minicars are 30 percent of Japan's market because tax rates there favor cars with engines smaller than 660cc.

Why doesn't the industry push for a technology-neutral carbon tax to replace the current technology-picking fuel taxes? That would be the most effective way to let the market, i.e. consumers, choose the powertrain technologies of the future.

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