Mercatus Events

Paving New Roads: Exploring Issues in Energy & Transportation

Aug 14, 2007 – Aug 16, 2007
12:00pm – 1:30pm
B-339 Rayburn House Office Building

Schedule: 

Session 1: Tuesday, August 14th
Challenges to Implementing a State-Level
versus National Greenhouse Gas Emissions Cap
Dr. Frank Wolak
Professor of Economics
Stanford University 

Click Here to view the powerpoint prsentation from session 1.

Click Here to listen to an audio archive of session 1.

Session 2: Wednesday, August 15th
Hands on Gas Markets: An Interactive Look at Gasoline Markets  
Dr. Bart Wilson
Associate Professor of Economics
George Mason University

Click Here to view the powerpoint presentation from session 2.

Click Here to listen to an audio archive of session 2.

Session 3: Thursday, August 16th
Hard Travelin': The Economics behind Traffic Congestion  
Dr. Kenneth Button
University Professor & Director
Center for Transportation Policy, Operations, and Logistics
George Mason University 

Click Here to view the powerpoint presentation from session 3.

Click Here to listen to an audio archive of session 3.

Energy issues have dominated the legislative agenda of the 110th Congress.  From CAFE standards to ethanol subsidies, legislators must consider rising energy costs, alternatives to fossil fuel and constituents concerned with increasing carbon emissions.  The geographic scope of pollution means that mechanisms must extend well beyond any one state.  At the pump, consumer advocates and gas-station owners say industry giants such as ExxonMobil and ChevronTexaco play "pricing games," and when prices rise, many claim there is "price gouging."  All the while, Americans are now spending more time in their cars: rush hour lasts considerably longer than sixty minutes.  One report estimates the average driver spends more than 60 hours per year waiting in traffic jams.  In effect, Congress is facing a tricky job of crafting legislation that must balance the energy interests of consumers and producers, while considering how those interests will affect the environment. 

To help Congressional staffers better understand the markets and "missing markets" associated with greenhouse gas (GHG) emissions, gasoline and traffic congestion, the Mercatus Center at George Mason University offered a seminar that focused on the economics of energy.  On the second day, policy makers had the opportunity to take on the roles of station owners and refiners in a computer-simulated gasoline market. 

General questions our economists addressed:

  • How do cap-and-trade mechanisms, emissions taxes and other hybrid market-based mechanisms compare and contrast? Can all market participants find it in their interest to comply with regulation?
  • How will the permits to emit GHGs be allocated among existing and new market participants? How can a program be designed to address a control mechanism on a state versus national level?
  • Are Americans being taken advantage of at the pump?
  • What is zone pricing and divorcement and how does it have an impact on gas prices?
  • What can economics teach us about traffic congestion?  What are the incentives that motivate commuters? 
  • What have other countries done to alleviate traffic congestion?  What can we learn from these examples?