To the Editor:

In “The House’s Duty on Energy” (editorial, July 20), you are right to call for an increase in auto fuel-efficiency standards. But you don’t mention another promising energy conservation idea that should be promoted: pay-as-you-drive insurance.

If insurance fees were assessed on a per-mile basis, instead of being charged as a lump sum that is largely independent of miles driven, the change in incentives would reduce miles driven by close to 10 percent.

Given the urgency of global warming, we can’t afford to be too lazy to consider new ideas.

Dean Baker
Washington, July 20, 2007
The writer is co-director of the Center for Economic and Policy Research.

Note from KBJ: I like this proposal. I drive 4,500 miles per year.