Stock pricesI wish I could claim credit for this idea, but I cannot.  Today in a class of mine the idea of car vehicle or vehicle mile traveled cap and trade was briefly bandied about.  Cap and trade is the basic idea of setting some sort of limit on the use of a commodity and then giving permission for those who use the commodity to trade their allotted value of that commodity such that those who see the allotment as a surplus can trade to those who are in greater need of that commodity.  The idea is to spur innovation in use of environmentally hurtful products such as oil and coal, generally.

In the case of an automobile cap and trade either car ownership or vehicle miles traveled could be regulated.  In my opinion it would be far more effective to cap and trade the vehicle miles traveled than the cars themselves.  One author suggests how to pull off such a system:

Such a “cap and trade” (CAT) system would establish a mileage threshold and allow vehicle owners who drive fewer miles to use them later or sell them to vehicle owners whose mileage surpasses the allowable threshold. Credit and debit amounts would reflect relative fuel-efficiency based on EPA gas mileage ratings or similar manufacturer data. Administered most effectively at the state level, such a program would generate massive government revenue to research alternative energy sources. Reducing fossil-fuel consumption comes down not only to increasing miles per gallon (MPG) but to reducing miles driven per vehicle (MPV). Reducing MPV saves oil more directly than either the technological improvements that impact CAFÉ standards or increased gas taxes.

However, such a cap and trade program is effective and efficient only if it is coupled with a variety of other transit investments including new public transportation resources.  In addition, such a cap and trade system would be effective for encouraging re-engineering of zoning plans that facilitate sprawl and low urban density.   Without giving people better options of where to live and how to get around such a cap and trade program is simply a tax for those who live further away from their place of employment.  However, encouraging people to move closer to the central and regional cores of metropolitan areas is a relevant goal in itself.

Such a system, by making driving less desirable, also drives down our reliance on oil, always a good thing for political, social, economic and environmental reasons.

Of course, my notion right now is exceedingly vague and specifics would have to be developed on just what the cap on vehicle miles traveled would be, whether to create such a system at the federal or state level, how commercial vehicles would be allotted credits and by what means the vehicle miles traveled credits could be traded.

I personally would suggest establishing higher credits for commercial vehicles like delivery trucks and tractor trailers.  We cannot get rid of vehicles like FedEx trucks or bakery delivery vehicles.  However, you will find little love lost from me regarding 18-wheelers.  The sooner we can get a percentage of that freight off the roads onto the rails the better, if you ask me.

America needs to shed its auto infatuation.  That automobile is a tool and a useful one, but it should not be the source of daily existence for hours a day.  Getting people to live more densely, to utilize alternative transportation options and to be less dependent on oil all could be accomplished by a VMT cap and trade system.