Dylan+&+Jed

for all those TL;DR people we are reading HTF with Energy policy, Transition and Oil dependence

Deb is the 2A, Jylan is the 2N Enjoy.

We personally think YOU DON"T HAVE A CHANCE. So good luck. (sarcasm doesn't travel well over the interwebs. Also its a personal advocacy-voting issue)

Text: The United States federal government should increase the federal excise tax rate and phase-in a price floor and variable tax on gasoline for transportation infrastructure in the United States

First, transportation infrastructure is financed in one of two ways – through the general fund, or through increased revenue – Stimulus Programs finance through the general fund while failing to repair the Highway Trust Fund ARTBA 2k10 (American Road and Transportation Builders Association to the National Commission on Fiscal Responsibility and Reform “The Contribution of the Federal Transportation Investment Programs to Fiscal Responsibility and Deficit Reduction,” pg online @ [] //um-ef)// Second, Congress just passed a MASSIVE transportation bill – it should have triggered your disads, but didn’t fix the Highway Trust Fund Snyder 6/26 (Tanya Snyder became Streetsblog's Capitol Hill editor in September 2010 after covering Congress for Pacifica and public radio. She lives car-free in a transit-oriented and bike-friendly neighborhood of Washington, DC., pg online @ [] um-ef) Congressional leaders announced opaquely last week that they’d “ moved forward ” on a deal on the highway section of the transportation bill. That means transit, rail, and safety programs are still being negotiated. And it means the financing of the bill hasn’t yet gotten the seal of approval from the House. Still, both houses of Congress have agreed to spend more on the transportation bill **than the Highway Trust Fund** itself **can bear**. (The House gave its green light a couple weeks ago when it nixed the Broun motion to keep transportation spending to HTF receipt levels.) To overspend the HTF but still **plausibly deny** that they’re deficit-spending, the Senate Finance Committee has done some pretty fancy footwork to offset the expenditures with other savings. Chair Max Baucus (D-MT) squeezed blood from the stone of the U.S. budget, and many of his colleagues have lauded him as a miracle worker. But Taxpayers for Common Sense – and lots of other people with common sense – **say the numbers don’t really add up**. The information below comes from TCS’s report, released last week, on the Senate pay-fors. Stick with me here – this is all a little convoluted, but understanding the funding is a key part of the process. While the Senate transportation bill may be a good stop-gap compared to the option of even shorter extensions, a look at the funding shows why it provides **no long-term answers** to the question of how to pay for transportation. The sources of new **H** ighway **T** rust **F** und revenue Baucus et al came up with are : A transfer from the general fund: $4.97 billion. **This is the most obvious example of** **// deficit spending //** – **just taking money from the Treasury to pay for transportation.**That’s on top of $34.5 billion the Treasury has already coughed up in the last four years to bail out the H ighway T rust F und – something no one wanted to repeat. Dedication of imported car tariffs to the Highway Trust Fund: $4.52 billion. This revenue would no longer go to the general fund. A transfer from the Leaking Underground Storage Tank Trust Fund: $3.685 billion. TCS approves of this use of funds, since they come from the gas tax and are underspent at a three-to-one ratio. This transfer just eliminates most of the backlogged surplus. Dedication of the gas guzzler tax to the Highway Trust Fund: $0.697 billion. The government levies a fee on vehicles whose combined city and highway fuel economy is worse than 22.5 mpg (with exemptions, of course, for some of the worst offenders, like SUVs and minivans). It’s transportation-related, but the tax revenues have always gone into the general fund, so this functions as another transfer from the Treasury. Total new HTF revenues: 13.872 billion. So, since the Senate proposes to take from the general fund to plug the Highway Trust Fund, they have to pay back the Treasury somehow. That’s known on Capitol Hill as an “offset,” to avoid deficit spending. The principal new source of revenue to replenish the general fund is a pension stabilization provision, expected to yield $9.394 billion. By reducing the amount companies have to contribute to employees’ pensions — which are tax-free — that money will become taxable income. Even skeptics seem to agree that $9.394 billion is probably a reasonable amount to expect from this change. But TCS notes that the Pension Benefit Guaranty Corporation (PBGC), which guarantees pension benefits when a company goes bankrupt, has a $23 billion deficit, which they say would be a better fit for this chunk of money. There are 10 more offsets, most of them good for a negligible amount of money, but put them all together (with the pension change) and they total $17 billion. They include changes to arcane tax code provisions, increased enforcement of tax payment on Medicare providers and passport holders, and even **// a new tax // on “roll-your-own” cigarette machines**. So that’s enough to pay the general fund back for what the Highway Trust Fund took. But TCS says some of these represent **bogus savings**. For example, the government is planning to “save” $3.627 billion by further delaying a tax change that hasn’t even taken effect yet. The Senate bill would spend ten years’ worth of this “savings” in little more than a year. But that’s not all! The bill also includes ** extraneous spending ** on things that don’t have anything to do with transportation. Most of the non-transportation items have their own funding built in, but TCS wonders why they’re included in the bill at all. They include $ 3.627 billion for Gulf states’ coastal restoration, paid for out of fines from the BP oil spill; $1.4 billion for reauthorization of the land and water conservation fund, funded with oil drilling money; a change in the definition of a “small-issuer” bond, which is tax-exempt, and therefore forfeiting $0.761 billion in taxes; elimination of the cap on water and sewer bonds ; and relief from the alternative minimum tax for investors in private activity bonds (which are often used for infrastructure). The final item under “new spending” does, in fact, deal with transportation. In fact, it’s a key priority for transportation reformers: **bringing the transit tax benefit up** to the level of the parking benefit for commuters. Currently, the limit is $125 a month for transit and $240 for parking. Putting transit commuters on a level playing field with drivers is a significant transportation goal for this bill to achieve. TCS grumbles that the way to handle the imbalance is to lower the parking subsidy, which is fair enough. But if that’s not going to happen, the $0.139 billion it will cost to raise the transit benefit to achieve parity is well worth it. All together, whew, that’s a lot of complicated math just to avoid raising the gas tax. Thus the Plan: Text: The United States federal government should increase the federal excise tax rate and phase-in a price floor and variable tax on gasoline for transportation infrastructure in the United States. Next is Solvency – The plan solves – establishing a price floor sends a signal for renewable energy development, while increasing revenue for transportation infrastructure Abelkop 2k9 (Adam, J.D., University of Iowa College of Law, 2010; B.A., Wake Forest University, PHd Student @ Univ of Indiana, “Why the Government Should Drink Your Milkshake: The Case for Restructuring the Federal Gas Tax,” The Journal of Corporation Law Winter, 2009, 35 Iowa J. Corp. L. 393 pg lexis//um-ef)// Congress should enact legislation to restructure the federal gasoline tax to better internalize the external costs of gasoline consumption**and to send** ** a price signal to investors that would afford them the certainty that they require to take risks on clean energy technology**. The following Parts outline a recipe for how the government should accomplish this task. A. Phase-In a Price Floor and Variable Tax on Gasoline **Congress should phase-in a price floor and variable tax on gasoline**. The price floor mechanism begins with a target price. The amount of the variable tax is the difference between the target price and the market price. Thus, if the market price of a gallon of gasoline falls below the target, then the variable tax makes up the difference. n256 The "variable fuel tax ... increases as the market price drops and decreases as [market] prices rise." n257 If the market price rises above the price floor, then the variable tax becomes zero. The price floor and variable tax will function to stabilize the price at the pump : [*421] regardless of how much the market price fluctuates, the consumer will never pay less than the price floor for a gallon of gasoline. The target price is the key to the success of the price floor mechanism. If the target price is too low, then consumers will not change their consumption patterns and businesses will not feel confident enough to make investments in clean energy technology to the degree necessary to meaningfully contribute to the solution to climate change and oil dependence. If the target price is too high, then it could have a negative effect on economic productivity. There are two ways to limit the tax's economic fallout. First, the target price must not be set too high too early. This is easier said than done; but consider the state of the oil and gas market in mid-2008. The price of oil rose to $ 147 per barrel and gasoline peaked above $ 4 per gallon. Charles Krauthammer argues that "with $ 4 gas still fresh in our memories, the psychological impact of a tax that boosts the pump price to near $ 3 would be far less than at any point in decades." n258 The relentless march of oil prices through mid-2008 certainly affected economic productivity, but high oil prices are not among the primary causes of the financial crisis. n259 Dramatic spikes in the price of oil are inevitable in the long-term n260 and could arise in the short-term. n261 The alternative to a gradual decline in consumption beginning in the short-term is an abrupt decline in consumption brought on by a supply shock and severe economic contraction in the medium-to-long-term. n262 **The longer the delay, the worse the contraction will be**. n263 It took $ 4 per gallon gasoline to change American consumption patterns in 2008, and it may take less of a price increase to maintain more manageable consumption patterns in the future. n264 Therefore, the ultimate price target should be between $ 3 and $ 4. n265 A $ 4 gallon of gasoline would still cost less than the $ 5 to $ 15 that it would cost if the price were to include all of gasoline's externalities. n266 Moreover, gasoline would still be cheaper in the United States at $ 4 per gallon than it would be in Canada or many EU nations, which tax gasoline at much higher rates. n267 The second way to limit the tax's economic fallout is to phase it in. n268 Beginning with a modest price floor of $ 2 per gallon, for example, and gradually increasing the [*422] target over time would provide consumers and businesses with lead time to prepare for the increased fuel costs. If Congress offsets the gasoline tax increases by simultaneously phasing out payroll or income taxes, then it could set the gasoline price floor higher. As a failsafe, Congress could include a provision in the tax that would allow the IRS to adjust the target price based on its observed effects on gasoline consumption and economic activity. Finally, the statute should adjust the price floor to account for inflation. n269 B. Phase-In Increases in the Current Gasoline Tax In addition to establishing a variable tax on gasoline, Congress should maintain and increase the current excise gasoline tax. Retailers set the price of gasoline, but each phase of the value chain adds to the gasoline's cost. n270 Retailers incorporate these costs into the ultimate price. n271 If gasoline retailers and producers know that the new tax will force consumers to pay a minimum price, then they could simply raise their prices to capture the tax revenue that would otherwise go to the federal government. In other words, in response to a price floor on gasoline, the market could price gasoline equal to or near the statutorily mandated target price. W **ith a price floor of $ 4 per gallon and a market price of, say, $ 3.50 per gallon, the federal government should collect $ 0.50 per gallon in tax revenue**. Knowing that consumers will pay $ 4 per gallon, though, refiners, distributors, and retailers could simply raise their prices - thereby raising the market price - to, say, $ 3.75 per gallon. The market, then, would capture $ 0.25 per gallon that would otherwise have been federal tax revenue. Of course, competition always operates to drive down the market price, and this scenario also raises the specter of anticompetitive collusion and possible antitrust violations. This situation, though, is not outside the realm of possibility. States could also raise their respective gasoline taxes to capture a larger portion of the would-be federal tax revenue. Again, imagine a price floor of $ 4 per gallon and a market price of $ 3.50 per gallon in State A. State A, knowing that the federal price floor will compel consumers to pay $ 4 per gallon, could simply raise its own state tax on gasoline by $ 0.50 to capture the tax revenue that would otherwise go to the federal government. This scenario is easy to envision and likely to occur. To ensure that it captures a greater share of the revenue from the variable tax than the current $ 0.184 per gallon excise tax, the federal government **should increase the federal excise tax rate**. The level of the tax increase will depend on how much revenue the federal government determines that it wants to capture from the variable tax. If Congress phases out payroll or income taxes or issues rebates to low-income earners to offset the economic effects of the increase in the gasoline tax, then it will likely also need to increase its current excise tax on gasoline or make do with a smaller budget. Regardless of who captures the tax revenue, though, **the establishment of a price floor on gasoline would send an appropriate price signal to the energy market and achieve more efficient cost/price integration than does the present market for gasoline**. [*423] C. Revenue Distribution and Tax Offsets The current gasoline tax is the Highway Trust Fund's (HTF) **primary source of revenue**. n272 Many supporters of gasoline tax reform argue, however, that additional revenue from gasoline tax increases should be devoted to investment in renewable energy technology. n273 As appealing as this option is to clean energy advocates, it may not be possible or practical. **The HTF is presently underfunded and many portions of the federal highway system are in disrepair.** n274 At the least, **Congress should not divert the current gasoline tax revenue away from funding the HTF without establishing an alternate source of revenue for the HTF.** Additionally, the gasoline tax is regressive. n275 It would therefore be prudent to either redistribute the tax revenue to low-income earners in the form of tax rebates or to phase out certain payroll or income taxes, n276 in which case Congress would need to raise the gasoline tax to make up for the lost revenue. The desirability of such changes to the Internal Revenue Code is a contentious issue and beyond the scope of this Note. Ultimately, the tax revenue generated from an increase in the gasoline tax would not - and should not - be distributed to any single use, but should be allocated as the government deems appropriate. The plan kills damaging CAFÉ Standards and transitions away from government interventions into the market Krauthammer 2k9 (Charles, American Pulitzer Prize–winning syndicated columnist, political commentator, and physician, McGill University degree in political science and economics, Commonwealth Scholar in politics at Balliol College, Oxford, Doctor of Medicine from Harvard Medical School “The Net-Zero Gas Tax; A once-in-a-generation chance,” pg lexisum-ef) So why even think about it? Because the virtues of a gas tax remain what they have always been. A tax that suppresses U.S. gas consumption can have a major effect **on reducing world oil prices**. And the benefits of low world oil prices are obvious: They put tremendous pressure on OPEC, as evidenced by its disarray during the current collapse; they deal serious economic damage to energy-exporting geopolitical adversaries such as Russia, Venezuela, and Iran ; and they reduce the enormous U.S. imbalance of oil trade which last year alone diverted a quarter of $1 trillion abroad. Furthermore, a reduction in U.S. demand alters the balance of power between producer and consumer, making us less dependent on oil exporters. **It begins weaning us off foreign oil,** and, if combined with nuclear power and renewed U.S. oil and gas drilling, puts us on the road to energy independence. High gas prices, whether achieved by market forces or by government imposition, encourage fuel economy. In the short term, they simply reduce the amount of driving. In the longer term, they lead to the increased (voluntary) shift to more fuel-efficient cars. **They render** ** redundant and unnecessary the absurd CAFE standards -** -the ever-changing Corporate Average Fuel Economy regulations that mandate the fuel efficiency of various car and truck fleets -- **which introduce** ** terrible distortions into the market **. As the consumer market adjusts itself to more fuel-efficient autos, the green car culture of the future that environmentalists are attempting to impose by decree begins to shape itself unmandated. This shift has the collateral environmental effect of reducing pollution and CO2 emissions, an important benefit for those who believe in man-made global warming and a painless bonus for agnostics (like me) who nonetheless believe that the endless pumping of CO2 into the atmosphere cannot be a good thing. These benefits are blindingly obvious. They always have been. But the only time you can possibly think of imposing a tax to achieve them is when oil prices are very low. We had such an opportunity when prices collapsed in the mid-1980s and again in the late 1990s. Both opportunities were squandered. Nothing was done. Today we are experiencing a unique moment. Oil prices are in a historic free fall from a peak of $147 a barrel to $39 today. In July, U.S. gasoline was selling for $4.11 a gallon. It now sells for $1.65. With $4 gas still fresh in our memories, the psychological impact of a tax that boosts the pump price to near $3 would be far less than at any point in decades. Indeed, an immediate $1 tax would still leave the price more than one-third below its July peak. The rub, of course, is that this price drop is happening at a time of severe recession. Not only would the cash-strapped consumer rebel against a gas tax. The economic pitfalls would be enormous. At a time when overall consumer demand is shrinking, any tax would further drain the economy of disposable income, decreasing purchasing power just when consumer spending needs to be supported. What to do? Something radically new. A net-zero gas tax. Not a freestanding gas tax but a swap that couples the tax with an equal payroll tax reduction. A two-part solution that yields the government no net increase in revenue and, more importantly--that is why this proposal is different from others--immediately renders the average gasoline consumer financially whole. Here is how it works. The simultaneous enactment of two measures: A $1 increase in the federal gasoline tax--together with an immediate $14 a week reduction of the FICA tax. Indeed, that reduction in payroll tax should go into effect the preceding week, so that the upside of the swap (the cash from the payroll tax rebate) is in hand even before the downside (the tax) kicks in. The math is simple. The average American buys roughly 14 gallons of gasoline a week. The $1 gas tax takes $14 out of his pocket. The reduction in payroll tax puts it right back. The average driver comes out even, and the government makes nothing on the transaction. (There are, of course, more drivers than workers--203 million vs. 163 million. The 10 million unemployed would receive the extra $14 in their unemployment insurance checks. And the elderly who drive--there are 30 million licensed drivers over 65--would receive it with their Social Security payments.) Revenue neutrality is essential. No money is taken out of the economy. Washington doesn't get fatter. Nor does it get leaner. It is simply a transfer agent moving money from one activity (gasoline purchasing) to another (employment) with zero net revenue for the government. Revenue neutrality for the consumer is perhaps even more important. Unlike the stand-alone gas tax, it does not drain his wallet, which would produce not only insuperable popular resistance but also a new drag on purchasing power in the midst of a severe recession. Unlike other tax rebate plans, moreover, the consumer doesn't have to wait for a lump-sum reimbursement at tax time next April, after having seethed for a year about government robbing him every time he fills up. The reimbursement is immediate. Indeed, at its inception, the reimbursement precedes the tax expenditure. One nice detail is that the $14 rebate is mildly progressive. The lower wage earner gets a slightly greater percentage of his payroll tax reduced than does the higher earner. But that's a side effect. The main point is that the federal government is left with no net revenue--even temporarily. And the average worker is left with no net loss. (As the tax takes effect and demand is suppressed, average gas consumption will begin to fall below 14 gallons a week. There would need to be a review, say yearly, to adjust the payroll tax rebate to maintain revenue neutrality. For example, at 13 gallons purchased per week, the rebate would be reduced to $13.) Of course, as with any simple proposal, there are complications. Doesn't reimbursement-by-payroll-tax-cut just cancel out the incentive to drive less and shift to fuel-efficient cars? No. The $14 in cash can be spent on anything. You can blow it all on gas by driving your usual number of miles, or you can drive a bit less and actually have money in your pocket for something else. There's no particular reason why the individual consumer would want to plow it all back into a commodity that is now $1 more expensive. When something becomes more expensive, less of it is bought. The idea that the demand for gasoline is inelastic is a myth. A 2007 study done at the University of California, Davis, shows that during the oil shocks of the late 1970s, a 20 percent increase in oil prices produced a 6 percent drop in per capita gas consumption. During the first half of this decade, demand proved more resistant to change--until the dramatic increases of the last two years. Between November 2007 and October 2008, the United States experienced the largest continual decline in driving history (100 billion miles). Last August, shortly after pump prices peaked at $4.11 per gallon, the year-on-year decrease in driving reached 5.6 percent--the largest ever year-to-year decline recorded in a single month, reported the Department of Transportation. (Records go back to 1942.) At the same time, mass transit--buses, subways, and light rail--has seen record increases in ridership. Amtrak reported more riders and revenue in fiscal 2008 than ever in its 37-year history. Gasoline demand can be stubbornly inelastic, but only up to a point. In this last run-up, the point of free fall appeared to be around $4. If it turns out that at the current world price of $39 a barrel, a $1 tax does not discourage demand enough to keep the price down, we simply increase the tax. The beauty of the gas tax is that we--and not OPEC--do the adjusting. And that increase in price doesn't go into the pocket of various foreign thugs and unfriendlies, but back into the pocket of the American consumer. What about special cases? Of course there are variations in how much people drive. It depends on geography, occupation, and a host of other factors. These variations are unavoidable, and in part, welcome. The whole idea is to reward those who drive less and to disadvantage those who drive more. Indeed, inequities of this sort are always introduced when, for overarching national reasons, government creates incentives and disincentives for certain behaviors. A tax credit for college tuition essentially takes money out of the non-college going population to subsidize those who do go--and will likely be wealthier in the end than their non-college contributors. Not very fair. Nonetheless, we support such incentives because college education is a national good that we wish to encourage. Decreased oil consumption is a similarly desirable national good. There will certainly be special cases, such as truck drivers and others for whom longer distance driving is a necessity that might warrant some special program of relief. That would require some small bureaucracy, some filings for exemption or rebate, and perhaps even some very minor tweak of the gas tax (say, an extra penny or two beyond the dollar). But that's a detail. Most people can drive less. They already do. Why a $1 tax? Because we need a significant increase in the cost of gasoline to change our habits--or, more accurately, maintain the new driving habits and auto purchase patterns that have already occurred as a result of the recent oil shock. We know from the history of the 1980s and 1990s that these habits will be undone and unlearned if gasoline remains at today's amazingly low price. In the very short time that prices have been this low, we have already seen a slight rebound in SUV sales. They remain far below the level of last year--in part because no one is buying anything in this recession, and in part because we have not fully recovered from the psychological impact of $4 gasoline. We are not quite ready to believe that gas will remain this low. But if it does remain this low, as the night follows day, we will resume our gas-guzzling habits. It might therefore be objected that a $1 gasoline tax won't be enough. If $4 was the price point that precipitated a major decrease in driving and a collapse of SUV sales, an immediate imposition of a $1 gas tax would only bring the average price to $2.65. To which I have two answers. First, my preliminary assumption is that it takes $4 to break the habit of gas-guzzling profligacy. But once that is done, it might take something less, only in the range of $3, to maintain the new habit. It may turn out that these guesses are slightly off. The virtue of a gas tax is that these conjectures can be empirically tested and refined, and the precise amount of the tax adjusted to consumer response. Second, my personal preference would be a $1.25 tax today (at $1.65 gasoline) or even a $1.50 tax if gas prices begin to slide below $1.50--the target being near-$3 gasoline. (The payroll tax rebate would, of course, be adjusted accordingly: If the tax is $1.50, the rebate is $21 a week.) The $1 proposal is offered because it seems more politically palatable. My personal preference for a higher initial tax stems from my assumption that the more sharply and quickly the higher prices are imposed, the greater and more lasting the effect on consumption. But whatever one's assumptions and choice of initial tax, the net-zero tax swap remains flexible, adjustable, testable, and nonbureaucratic. Behavior is changed, driving is curtailed, fuel efficiency is increased, without any of the arbitrary, shifting, often mindless mandates **decreed by Congress**. **This is a major benefit of the gas tax that is generally overlooked**. It is not just an alternative to regulation; because it is so much more efficient, ** it is a killer of regulation ****. **The most egregious of these regulations are the fleet fuel efficiency ( CAFE) standards forced on auto companies.**Rather than creating market conditions that encourage people to voluntarily buy greener cars, the CAFE standards simply impose them**. And once the regulations are written--with their arbitrary miles-per-gallon numbers and target dates--they are not easily changed. If they are changed, moreover, they cause massive dislocation, and yet more inefficiency, in the auto industry. **CAFE standards have proven** ** devastating to Detroit **. When oil prices were relatively low, they forced U.S. auto companies to produce small cars that they could only sell at a loss. They were essentially making unsellable cars to fulfill mandated quotas, like steel producers in socialist countries meeting five-year plan production targets with equal disregard for demand. Yet the great 2008 run-up in world oil prices showed what happens without any government coercion. As the price of gas approached $4 a gallon, there was a collapse of big-car sales that caused U.S. manufacturers to begin cutting SUV production and restructuring the composition of their fleets. GM's CEO, for example, declared in June, "these prices are changing consumer behavior and changing it rapidly," and announced the closing of four SUV plants and the addition of a third shift in two plants making smaller cars. **Which is precisely why** ** a gas tax would render these government-dictated regulations irrelevant and obsolete **. If you want to shift to fuel-efficient cars, don't mandate, don't scold, don't appeal to the better angels of our nature. **Find the price point, reach it with a tax, and let the market do the rest**. Yes, a high gas tax constitutes a very serious government intervention. But it has the virtue of simplicity. It is clean, adaptable, and easy to administer. Admittedly, it takes a massive external force to alter behavior and tastes. But given the national security and the economic need for more fuel efficiency, and given the leverage that environmental considerations will have on the incoming Democratic administration and Democratic Congress, that change in behavior and taste will occur one way or the other. Better a gas tax that activates free market mechanisms rather than regulation that causes cascading market distortions. The net-zero gas tax not only obviates the need for government regulation. **It obviates the need for government spending as well.**Expensive gas creates the market for the fuel-efficient car withoutW**ashington having to pick winners and losers with massive government "investment" and arbitrary grants**. No regulations, no mandates, no spending programs to prop up the production of green cars that consumer demand would not otherwise support. And if we find this transition going too quickly or too slowly, we can alter it with the simple expedient of altering the gas tax, rather than undertaking the enormously complicated review and rewriting of fuel-efficiency regulations.
 * Transportation Investment** and User Financing When Congress created the National System of Interstate and Defense Highways in 1956, it considered two options for financing the construction costs—borrow the money by issuing highway bonds or enact pay-as-you-go taxes on highway users. After much debate, the second option was chosen. Congress raised the federal gasoline tax from two cents per gallon to four cents per gallon and directed the revenues into the newly-created Highway Trust Fund ( HTF ). **Virtually all federal highway investment since then has been financed from the HTF** . In 1982, Congress added the Mass Transit Account (MTA) to the HTF. The tax rate on gasoline was increased to 9 cents per gallon, with revenues from one cent of the five cent increase being directed into the MTA. Since then, most federal investment in mass transit has been financed from the Mass Transit Account, while highway improvements have been funded from the Highway Account (HA). Subsequently, the federal tax on gasoline has been increased only twice—in 1990 and 1993 —and currently stands are 18.3 cents per gallon. There is also a 24.3 cent-per-gallon tax on diesel fuel (and equivalent taxes on other motor fuels) as well as taxes on large trucks, which are also credited to the HTF. A similar user-fee-funded trust fund finances most federal investment in the nation’s airports and air transportation system. Through the years, user fee financed trust funds have proven a remarkably responsible way to finance federal investment in highways, public transportation and airports. In fact, during most years since its creation in 1956, the Highway Trust Fund generated balances that helped mask the size of the unified federal deficit, leading stakeholders to argue that Congress was violating the trust of highway users by failing to invest all user fee receipts in highway and transit improvements. Three factors have had a significant effect on the HTF balance in recent years: • When Congress enacted the Transportation Equity Act for the 21st Century (TEA-21) in 1998, it transferred $8 billion from the Highway Trust Fund balance to the General Fund at the start of FY 1999 and provided that interest on the HTF balance would henceforth be credited to the General Fund—the only trust fund so treated—costing the HTF almost $11 billion in foregone revenues. In addition, when Congress enacted motor fuel tax increases in 1990 and 1993, more than $22 billion of the revenues were deposited in the General Fund despite being taxes levied on highway users for the purpose of investing in highway and transit improvements. • Economic downturns in 2001 and 2008-09 had a depressing effect on highway travel and thus revenues into the HTF, as did unusually high gasoline and diesel fuel prices in 2008. In addition, highway construction costs skyrocketed between 2004 and 2009, due to world-wide increases in the cost of asphalt, cement and steel. Both effects put immense pressure on HTF revenues. • In 2005, Congress enacted the Safe, Accountable, Flexible, and Efficient Transportation Equity Act – A Legacy for Users (SAFETEA-LU) which increased federal investment in highway and transit improvements without increasing user fees. To accomplish that, Congress funded the federal highway and public transportation programs at a level where projected outlays through FY 2009 would not only use projected HTF revenues, but would also spend down much of the fund’s existing balance. 3 The HTF balance peaked at $31 billion in FY 2000 and has since been drawn down. Nonetheless, between 1956 and 2007—a span of more than 50 years—the federal highway and mass transit programs had no net impact on the federal budget. User revenues into the Highway Trust Fund financed all federal expenditures on highway and transit improvements, imposing no burden on the federal General Fund or the federal budget deficit. The Airport and Airways Trust Fund (AATF) has had a similar history. Created in 1971, the AATF has had positive balances most years since, punctuated only by a period in the mid-1990s when user fees on air travelers had temporarily expired. By FY 2000, the AATF had a balance of more than $7 billion. The need to improve airport security after September 11, 2001, resulted in a temporary decline in the AATF balance, but the balance is projected to bounce back to about $10 billion in FY 2010. The AATF thus has also been an example of how a user-fee financed program contributes to fiscal responsibility. American Recovery and Reinvestment Act and General Fund Transfers Since 2007, General Fund revenues have been used on several occasions to supplement HTF revenues to finance highway and public transportation improvements, which added to the unified federal deficit. This occurred for two reasons: Economic recovery. With the economy in its worst downturn since the Great Depression and unemployment approaching 10 percent, Congress included $48 billion for ready-to-go transportation improvements in the American Recovery and Reinvestment Act of 2009 ( ARRA). All of the transportation improvements **were financed from the federal General Fund**, as was the rest of the $787 billion Recovery Act. Since the purpose of the legislation was to stimulate economic recovery and support jobs in the United States, it was entirely appropriate to finance the highway, transit and airport construction projects through general fund deficits . **While this violated the time-honored users-pay approach to financing transportation improvements, the impetus for the spending was not to improve the transportation system, but to use such improvements to stimulate the economy** and support jobs. Once this is accomplished, however **, asking general taxpayers to pay for regular improvements to the nation’s transportation system would be a clear departure from the user fee financing principle that has served these programs and the federal budget well for decades** . Rescue the Highway Trust Fund. Since FY 2007, user revenues into the Highway Trust Fund have been significantly less than expected , due largely to the impact of the economic recession on highway travel (both personal and freight) as discussed above. The failure to generate new HTF revenues to support the SAFETEA-LU highway and public transportation investments made the trust fund extremely vulnerable to these economic shocks. With outlays exceeding revenues, the Highway Account of the HTF was in danger of running out of funds toward the end of FY 2008 —two years earlier than the authors of SAFETEA-LU had forecast. Projections showed the transit program would run out of money two years later. To prevent the U.S. government from defaulting on its highway and transit program obligations, Congress injected $8 billion into the Highway Account in FY 2008, followed by $7 billion in FY 2009 and $14.7 billion in FY 2010. In addition, $4.8 billion was injected into the Mass Transit Account in FY 2010. These transfers came from the General Fund and clearly affected the size of the federal budget deficits those years. All three transfers, however, represented previously foregone user fee revenues that should have gone into the Highway Trust Fund , **which instead were credited to the General Fund** —$8 billion transferred from the HTF to the GF in FY 1999, interest on the HTF balance that was credited to the GF, and federal aid to state and local governments to repair transportation infrastructure damaged by natural disasters (which for many years was paid from the HFT whereas all other federal disaster relief was paid from the GF). If Congress had not diverted these user revenues from the HTF into the GF, there would, arguably, have been no need for the General Fund transfers in FY 2008, FY 2009 and FY 2010. The injection of revenues into the HTF between FY 2008 and FY 2010 is, unfortunately, only a stopgap action . The Congressional Budget Office projects that both the Highway Account and Mass Transit Account will exhaust their existing balances during 2012 or 2013. While this is a serious concern, **the far more important issue is that projected Highway Trust Fund revenues in the years ahead are far short of the nation’s** ** transportation investment needs** . The Gap Between Needs and Revenues The U.S. Department of Transportation (U.S. DOT) recently released its 2008 Report to Congress on the Status of the Nation’s Highways, Bridges, and Transit: Conditions and Performance. The report found that the United States is investing less each year than the minimum needed just to maintain current physical conditions and operational performance on the nation’s highways and transit systems. For highways, report data indicate that federal highway funding in the next surface transportation bill would have start at $69.5 billion, at minimum, in FY 2010 and grow to $76.3 billion by 2015 just to maintain physical conditions and operating performance on the nation’s highways and bridges. By contrast, Congress provided funding of only $41.1 billion for the federal highway program for FY 2010, almost $28.5 billion less than would be needed just to maintain current conditions. Beyond that, the outlook is for an even greater shortfall. Projected Highway Account revenues range from $32.6 billion in FY 2011 to $35.8 billion in FY 2015, according to the Congressional Budget Office. The annual funding gap during this period averages $39 billion. **The contrast between investment needs and revenues** through FY 2017 is shown in Figure 1. Federal highway funding met needs in FY 2009 only because of the ARRA highway stimulus. For public transportation, the federal share of transit capital investment during the next surface transportation bill would need to be $8.6 billion in FY 2010, rising to $9.4 billion by FY 2015. Since only 70 percent of federal transit funds go into capital improvements, funding for the transit program in the next authorization bill would thus have to range from $12.3 billion in FY 2010 to $13.5 billion in FY 2015. By comparison, Congress enacted transit program funding of $10.34 billion in FY 2010, which is somewhat less than required to maintain current conditions. It should be noted that funds to construct new transit systems are not included in the Conditions and Performance Report data. The cost of new systems would add substantially to the transit investment needs identified in the report. Moreover, the federal share of transit needs for FY 2010-2015 exceeds projected MTA revenues, which means additional revenues will be required. Federal Commission Recommendations SAFETEA-LUcreated two commissions **to examine the nation’s transportation investment needs**and recommend revenue options —the National Surface Transportation Infrastructure Financing Commission and the National Surface Transportation Policy & Revenue Study Commission. Both have issued their final reports. Both commissions arrived at the same conclusion after exhaustively studying myriad revenue enhancing options. In the short-term, both commissions concluded t**he most efficient way to increase revenue to finance** needed **federal investment** in highway and transit improvements ** is to raise the federal gas ** and diesel tax rates and then index these excises annually to inflation: • The Financing Commission recommends an immediate 10 cents per gallon excise rate increase on gasoline sales and a 15 cents per gallon excise rate increase for diesel fuel sales which would both thereafter be annually adjusted to inflation. This level is intended simply to recapture purchasing power lost since the 1993 rate increase. • The Policy & Revenue Study Commission recommends that the federal fuel tax be increased from 5 to 8 cents per gallon per year over the next 5 years, after which it should be indexed to inflation. This blue-ribbon group considered not only recapturing lost purchasing power, **but also generating more revenue to meet** the **program investments** it believes are necessary to reform the program and meet future national goals for system preservation, capacity enhancements to facilitate freight movement, transportation-related emission reductions and security, among others. In the longer term, both commissions recommend transition to a vehicle-miles-travelled, or VMT-based, user fee system. The 10 cent gasoline/15 cent diesel excise enhancements would translate into approximately $20 billion per year in additional revenue for the Highway Trust Fund. With these adjustments, on average, individual households would pay approximately $9 per month more in federal gas taxes (individual households now pay on average $17 per month). By comparison, the average household pays about $300 per month to operate and maintain its cars (and about $800 per month to own and operate them). The overall level of revenue enhancement recommended by the National Surface Transportation Policy & Revenue Study Commission is in the range necessary to meet the national highway and transit needs previously discussed. It is also well worth noting that major national business and highway user organizations—including the U.S. Chamber of Commerce and the American Trucking Associations—are publicly supporting a federal motor fuels excise increase to finance an expanded transportation improvements.

Advantage 1: U.S. Energy Policy First, current Federal Energy Strategies fail – they impose market distortions, and ineffective constraints on private industry Turgeon 2k10 (Evan N. Turgeon, Legal Associate at the Cato Institute; J.D.University of Virginia School of Law 2009; B.A. Tufts University 2004, “Triple-Dividends: Toward Pigovian Gasoline Taxation,” Journal of Land, Resources, & Envir onmental Law 2010, pg lexis//um-ef)// The U nited S tates ' current energy policies take an ineffective, piecemeal approach to addressing the nation's transportation energy needs - **an approach that forestalls a comprehensive, coordinated policy from being implemented**. [*147] A. Traditional Energy Policies Since the automobile replaced the train as Americans' primary mode of transportation early in the 20th century, United States foreign policy has focused on ensuring American industry and individual consumers have access to inexpensive petroleum. Enormous military and foreign policy expenditures have been maintained to this end. This is not to suggest that such government actions were unwise. n4 Rather, it shows that government foreign policy expenditures have distorted the market for oil. Foreign policy expenditures represent, effectively, a government subsidy of gasoline's true cost. Like any cost not realized by market actors, the low price of gasoline has led to overproduction and overconsumption of vehicles. These distortions have shaped the sprawling development of American society, which widespread car ownership made possible, and which requires Americans living in all but a handful of cities to rely on cars. Not only does the low price of gasoline keep car ownership high, it also decreases consumer demand for fuel-efficient vehicles. These trends have produced a country very dependent on artificially inexpensive foreign oil. Indeed, President George W. Bush went so far as to call this dependency an addiction. n5 But it is an addiction enabled by government policies; if American consumers are addicts, the United States government is their dealer. B. Alternative Energy Policies Recent government policies purportedly intended to wean Americans off oil do not correct existing market distortions, but rather **impose additional distortions**. Moreover, the fact that these policies are not aimed at making Americans drive less, but only at lessening the environmental impact of this level of driving, n6 suggests that considerations other than efficiency motivate lawmakers. n7 Initiatives promoting the production of biofuels and the consumption of fuel-efficient vehicles provide evidence of this distorting effect. [*148] 1. Biofuel Production Subsidies Biofuels such as ethanol and biodiesel have widely been promoted as a panacea to America's dependence on foreign oil. n8 Touted as providing emissions benefits over fossil fuels, n9 increasing national security, and revitalizing rural communities economically, n10 biofuels have received substantial political support. However, there is a broad consensus that given the low price of gasoline, these alternative fuels will not be competitive in the absences of government sub-sidies. n11 Among the many subsidies available to producers of biofuels, most notable is the Volumetric Ethanol Excise Tax Credit, or "blender's credit," which credits oil companies with $ .51 for each gallon of ethanol mixed into gasoline sold. n12 Biodiesel blenders receive a similar tax credit of $ 1.00 per gallon of "agri-biodiesel," made from plants such as soybeans, and $ .50 per gallon of "wastegrease biodiesel," made from recycled vegetable oils and animal fats. n13 Until December 31, 2008, small producers of ethanol and biodiesel received a tax credit of $ .10 per gallon of biofuel produced, up to 15 million gallons. n14 In addition, the government rewards fueling station owners with a tax credit of 30% (up to $ 30,000) towards the cost of installing biofuel-capable refueling equipment. n15 The federal government also imposes significant tariffs on imported biofuels; imported ethanol is subject first to a tariff equaling 2.5% of its total value, and second to a $ .54 per gallon tariff. n16 [*149] 2. Biofuel Consumption Incentives The government also provides tax credits to consumers who purchase hybrid vehicles, vehicles that run on biofuels, or other fuel-efficient cars. n17 Since hybrids cost $ 2,000 to $ 7,000 more than cars that run on gasoline, such incentives are necessary to make alternative fuel vehicles competitive. Savings from these vehicles' increased fuel economy take many years to compensate for the vehicles' higher prices, even when gasoline prices are high. Indeed, "from a short-term payback perspective, without the tax credits, hybrids make no sense for the average driver[.]" n18 However, tax credits available to consumers "start to go away when a car maker sells its 60,000th alternative-fuel vehicle, a level Toyota reached in mid-2006 and Honda hit in the third quarter of 2007." n19 Some states provide consumers incentives to purchase alternative fuel vehicles as well. For example, in California, hybrid and alternative-fuel vehicles are per-mitted to drive in carpool lanes regardless of the number of passengers they carry. n20 These primarily tax-based policies aim to compensate for the low relative price of gasoline by subsidizing biofuel production and consumption, in order to encourage producers and consumers to utilize non-petroleum resources more than they otherwise would. In this way, lawmakers respond to incentives produced by the artificially low price of gasoline by artificially lowering the price of alternatives. However, so distorting fuel markets has created numerous problems, described below. III. Shortcomings of the Current Approach These problems stem from the economic inefficiency inherent in government policies. Increasing the supply of alternative fuel vehicles rather than addressing the demand for them only encourages dependence on government subsidies, and burdens the government with a role better left to the private sector. As a consequence, the United States' uncoordinated assortment of transportation energy [*150] policies poorly addresses the nation's economic, national security, and environmental concerns. n21 A. Economic Inefficiency Current energy policies both produce and perpetuate inefficient externalities n22 **that undermine their success**. In the absence of externalities, price information encourages the optimal level of output: that where marginal cost equals marginal benefit. Market prices convey information in two ways; they tell producers what benefits consumers derive from goods and services, and they tell consumers what those goods' and services' production costs are. n23 However, the government's two-sided intervention in the transportation fuel market produces significant externalities unaccounted for in fuel prices. **Government policies artificially reduce the cost of transportation fuels such as gasoline**. This lower cost inflates consumer demand for these fuels, to the detriment of the United States' economy, national security, and environment. B. Economic Harm 1. Volatile Gasoline Prices Economic externalities produced by the government's current energy policies are significant. While American transportation consumes a great deal of petroleum products, especially gasoline, the United States' domestic petroleum resources are limited. As a consequence, American consumers and industry are vulnerable to price shocks in the international oil markets. n24 OPEC controls 41% of the world's petroleum reserves, providing member countries significant control over oil production and prices. n25 And as is true of any commodity, oil prices are inherently volatile. n26 "The price of crude oil fluctuates based on a wide variety of international and political events, seasonal demand, and other factors, with the [*151] price of crude [oil] determined in the global market." n27 This renders the gasoline market "vulnerable to hurricanes, accidents, crude supply interruptions, terrorists, and dictators." n28 This volatility interacts with consumer behavior in an interesting way. Although consumer demand for gasoline is relatively price inelastic n29 in the short term, n30 fluctuations in gasoline prices do affect individuals' long-term outlook, influencing consumer demand for vehicles, for example. In response to sharp increases in world oil prices during the 1970s n31 and since 2006, consumers seek more fuel-efficient vehicles, and these preferences correspondingly recede as gas prices drop. n32 However, because vehicle design and production lag behind demand, such drastic short-term shifts in consumer demand cripple the automobile industry. Publicly-traded automakers operate on short timelines. Even if they could accurately predict future consumer demand, automakers report earnings to shareholders on a quarterly basis, face constant operating costs, and must make regular payments on outstanding debt. Automakers therefore must respond to consumer demand tied to volatile gasoline prices, which is easier said than done. All too often, automakers fail to anticipate future demand accurately, causing fuel-efficient vehicles to hit the market just in time for falling oil prices to destroy the demand for them. n33 Indeed, as gas prices plunged in November 2008, "the Toyota [*152] Sequoia and Honda Pilot SUVs posted big gains while sales of most other cars plunged." n34 2. Ineffective, Unfair CAFE Standards These dynamics reveal the futility of lawmaker reliance on Corporate Average Fuel Economy (" CAFE") standards. CAFE standards mandate that automakers produce vehicles that meet certain fuel economy ratings. n35 From 1990 to 2007, cars were required to achieve an average fuel economy of 27.5 miles per gallon. n36 **In an attempt to decrease the United States' dependency on foreign oil, the 2007 Energy Independence and Security Act ("EISA") removed the previous CAFE exemption for sport utility vehicles and cargo vans and raised the efficiency mandate for all new passenger vehicles to 35 miles per gallon by the year 2020**. n37 This standard is projected to decrease United States oil consumption by 2.3 million barrels daily. n38 **However, such "government "efficiency' edicts are never efficient."** n39 The availability of efficient cars does not affect consumer purchasing decisions regarding efficiency - **only gas prices do that** . In the short term, people respond to higher fuel prices by purchasing more efficient vehicles, not by driving less. n40 Such behavior is emblematic of efficiency measures designed to decrease consumption. "The energy saved on a more efficient refrigerator trickles all too easily into a larger one, just as the calories saved with a Diet Coke generally trickle into a brownie." n41 **Ironically, CAFE standards may even work against government policies subsidizing biofuels because improvements in vehicle efficiency may forestall private research and investment in non-petroleum sources of transportation energy** . n42 [*153] Moreover, CAFE standards, intended to counterbalance incentives produced by other government policies, **represent a significant uncompensated government imposition on automakers**. When gas prices are low, CAFE standards force carmakers to lose money producing small vehicles for which there is less demand, in order to be allowed to produce the large vehicles that earn a profit. n43 **Regulators thus dump the true cost of government policies on the private sector**, creating the illusion of good government "as they impoverish society as a whole." n44 And, these Energy strategies gut U.S. Foreign Policy strategy – they ensure ineffective diplomatic leverage and lack of U.S. legitimacy Turgeon 2k10 (Evan N. Turgeon, Legal Associate at the Cato Institute; J.D.University of Virginia School of Law 2009; B.A. Tufts University 2004, “Triple-Dividends: Toward Pigovian Gasoline Taxation,” Journal of Land, Resources, & Envir onmental Law 2010, pg lexisum-ef) C. Foreign Policy Detriment In 1828, James Madison expressed his fear that insufficient governmental intervention in economic matters might betray American interests, writing, "[a] nation leaving its foreign trade, in all cases, to regulate itself, might soon find it regulated, by other nations, into a subserviency to a foreign interest ... ." n47 Just this has occurred in petroleum markets. "To the extent OPEC could maintain high and stable world oil prices, it replaced the [government supply] and import controls that had set the terms for energy markets in the United States for many [*154] years before the [1973 energy] crisis." n48 Since the crisis, OPEC-controlled petroleum markets have cost Americans dearly. n49 Ensuring a steady supply of foreign oil requires enormous foreign policy expenditures, which must be considered in evaluating the appropriateness of current energy policies. 1. Wealth Transfers to OPEC In 2007 alone, the United States imported over 4.9 billion barrels of oil. n50 At an average price of $ 66.29 per barrel, n51 this works out to over $ 325 billion sent overseas. Not only do these expenditures represent lost opportunities for the domestic economy, n52 but much of this money was sent to countries such as Russia, Iran, and Venezuela - countries whose strategic objectives conflict with those of the United States in many policy areas. Revenue from oil sales provides these countries the financial resources to expand their national powers, potentially to the detriment of the United States. n53 Especially problematic is the fact that OPEC member countries control 41% of the world petroleum reserves under national oil companies. n54 In the middle of the 20th century, the "Seven Sisters," a group of privately held oil companies, exerted a great deal of control over oil markets, and "responded to price signals to explore, invest, and promote technologies necessary to increase production." n55 The oligopoly of national oil companies that now control oil markets operate under vastly different incentives, limiting investment and restricting production to keep prices high and prolong the production horizon. n56 In so doing, OPEC reaps profits by undermining economic efficiency in world oil markets. n57 [*155] 2. Costly International Relations Moreover, the U nited S tates ' military, which maintains bases throughout the world, has as one of its strategic goals ensuring a supply of foreign oil for importation and domestic consumption. Funding such strategic holdings requires enormous annual expenditures. Estimates of the United States' FY 2009 military budget range from $ 515.4 billion n58 to $ 713.1 billion, n59 based on which items are included. Although U nited S tates military policy does not consider ensuring an adequate oil supply its only strategic objective, it is safe to assume that **defense expenditures could be reduced substantially** if foreign oil were less vital to the nation's stability. High oil demand imposes an additional foreign policy cost on the U nited S tates : **it raises the cost of international relations****. **The U nited S tates ' refusal to participate in international climate change initiatives **impairs the country's legitimacy in the global community**. This may increase the political costliness of foreign government compliance with the strategic objectives of the U nited S tates, **requiring greater American concessions in exchange for international cooperation**. The historical refusal of the United States to bind itself to multilateral energy use agreements also ensures that Americans will take little part in the deliberation over and drafting of such policies. n60 **International law detrimental to the U** nited **S** tates **' interests may result**. That lack of legitimacy ensures Nuclear and CBW War Dr. Barlow 2k2 (Jeffrey, March, Director of the Berglund Center for Internet Studies, holds the Matsushita Chair of Asian Studies at Pacific University, Ph.D. in history from UC Berkeley, 2K2, “American Power, Globalism, and the Internet: Editorial Essay”, The Journal of Education, Community and Values, http://bcis.pacificu.edu/journal/2002/03/editorial.php#6) Much of Nye’s analysis is intended to make a relatively simple point: That the U nited S tates is indefinitely unchallengeable in terms of its “hard power”; but “soft power” is growing steadily more important in a networked world, and is the more frangible of American sources of power. There will be a natural process that somewhat vitiates the impact of American soft power in any event as other information economies mature. For example, by 2010, Nye argues, there will be more Chinese Internet users than American ones.8 While American sites will remain very attractive, because of the fact that English has become the world’s second language, China too sits at the center of a linguistic empire that not only embraces the worldwide Diaspora of Chinese people, but has also in the past embraced much of East Asia including Korea, Japan, Vietnam, and other nations. .05. A Dichotomy or a Transition? (Return to Index) Nye’s position intersects at several points with the analysis of Manuel Castells, sociologist and the author of the encyclopedic multi-volume work, The Information Age: Economy, Society, and Culture.9 Nye’s argument follows in time upon that of Castells in that Castells wrote in 1996, Nye after September 11, 2002. But Nye’s position is ultimately grounded in an earlier tradition of “realist” definitions of power: Power used to be in the hands of princes, oligarchies, and ruling elites; it was defined as the capacity to impose one’s will on others. Modifying their behavior. This image of power does not fit with our reality any longer10… Castells spends far more time than does Nye considering the “Information Age.” In doing so, he perhaps has the advantage in contextualizing American power. His argument is also far more dynamic. To Castells, the Information Age is an ongoing process, which he considers from a number of perspectives. Nye believes that there are two dichotomous kinds of power: “hard” and “soft”. For Castells, there are not two kinds of power, but a still incomplete transition from one kind of power to another. For Castells, power is being permanently transformed; Nye’s hard power is eroding: states, even the most powerful one, the United States, now live in an environment marked by a decentralized net of “local terror equilibria.” 11 In the past, during the Cold War, several major states and their allies established an equilibrium based upon mutual assured destruction; this prevented any one power from dominating the global political or economic system, but it also protected each of the major states from the others. Following the collapse of the Soviet Union the U nited S tates then enjoyed a brief period of near absolute dominance. .06. American Power Following 9-11(Return to Index) But global processes had already distributed a variety of w eapons of m ass d estruction among major and minor powers, and more importantly, among non-state actors as well. September 11, 2002, revealed the vulnerabilities of even the greatest of powers to non-state actors. The devastating effect of the low-cost and relatively simple improvised weapons that were used then suddenly illuminated a terrible new world. The use of a bacteriological weapon, Anthrax, then followed quickly upon the trauma of 9-11---so quickly that historians may well treat the two events as one. This attack revealed an additional and, to many, even more terrifying vulnerability and again showed the new power of non-state actors. Castells refers to these sorts of weapons, including chemical and biological ones, as well as the feared low-yield “dirty” nuclear devices sometimes referred to as “suitcase bombs” as “veto technologies” and presumes that this new decentralized web of great and small states and non-state actors will require constant small interventions by many different powers to maintain a relative peace. This seems to be an apt description of events since September 11 as a variety of alliance s, states, and international organizations have joined the campaign against terrorism. There are, then, many indications that Castells is, to a considerable degree at least, correct in his analysis of state power in the Information Age, and Nye wrong. State power is evolving toward a decentralized fabric, like all else in the Information Age. .07. The Limitations of the Networked International System (Return to Index) There are also many indications that some in the American policy-making institutions understand the implications of a world like that described by Castells. Recently (March, 2002), the Pentagon report “The Nuclear Posture Review” discussed conditions under which the United States might use nuclear weapons. This analysis immediately attracted a great deal of attention because it suggested the first-strike employment of nuclear weapons against non-nuclear powers. Since the end of World War II such use has been presumed to be outside the parameters of civilized warfare, and particularly outside American nuclear doctrine. But times have changed. As stated by one reporter, Michael Gordon, “Another theme in the report is the possible use of nuclear weapons to destroy enemy stocks of biological weapons, chemical arms and other arms of mass destruction.” 12 These are, of course, precisely the “veto technologies” listed by Castells.13 The limitation in the current international system is probably most critically, from an American point of view, that it tends to restrain unilateral American action. As a result, great attention necessarily must be paid to alliances and coalition building. But if anything terrifies the international community it is the specter of nuclear war, or the possibility of a return to a Cold War system with its attendant enormous expenses and the inherent threat of destruction. .08. The Nuclear Posture Review (Return to Index) The “Nuclear Posture Review” represents the Bush administration’s attempt to break the bonds that presently restrains American power: first-strike use of nuclear weapons effectively removes the need to consult allies. It amounts to an attempt to restore the brief period of absolute domination (and absolute security) enjoyed by the U.S. following the fall of the Soviet Union, before we had become aware of the terrible new forces that could be employed by “rogue states” and criminal organizations such as Al Quaeda. If the United States were to be successful in putting the terrorist genie back in the bottle by threatening nuclear strikes on states that both harbor terrorists and possess weapons of mass destruction, including most especially chemical and bacteriological ones, then Nye is, perhaps, correct: There are two sorts of power and the United States can continue to enjoy a near monopoly of classical “hard” power. But Nye, like Castells, recognizes that “ under the influence of the information revolution and globalization, world politics is changing in a way that means Americans cannot achieve all of their international goals acting alone .”14 The uproar, both domestic and international But effective Multilateralism – led by the United States Solves – prevents multiple triggers for conflict and destruction Dr. Zakaria 2k8 (Fareed, Ph.D. in Government from Harvard University, & editor of Foreign Affairs magazine & Newsweek Internationa & professor of IR and political philosophy at Harvard and Columbia University, “Wanted: A New Grand Strategy”, 12/8/08, [] ) The "Global Trends " report identifies several worrying aspects of the new international order—competition for resources like oil, food, commodities and water; climate change; continued terrorist threats; and demographic shifts. But the most significant point it makes is that these changes are taking place at every level and at great speed in the global system. Nations with differing political and economic systems are flourishing. Subnational groups, with varied and contradictory agendas, are on the rise. Technology is increasing the pace of change. Such ferment is usually a recipe for instability. Sudden shifts can trigger sudden actions —terrorist attacks, secessionist outbreaks, nuclear brinksmanship. The likelihood of instability might increase because of the economic crisis. Despite some booms and busts—as well as 9/11 and the wars in Afghanistan and Iraq—the world has been living through an economic golden age. Global growth has been stronger for the past five years than in any comparable period for almost five decades. Average per capita income has risen faster than in any such period in recorded history. But that era is over. The next five years are likely to be marked by slow growth, perhaps even stagnation and retreat, in certain important areas. What will be the political effects of this slowdown? Historically, economic turmoil has been accompanied by social unrest, nationalism and protectionism. We might avoid these dangers, but it is worth being acutely aware of them. At the broadest level, the objective of the U nited S tates should be to stabilize the current global order and to create mechanisms through which change—the rise of new powers, economic turmoil, the challenge of subnational grou p s like Al Qaeda— can be accommodated without overturning the international order. Why? The world as it is organized today powerfully serves America's interests and ideals. The greater the openness of the global system, the better the prospects for trade, commerce, contact, pluralism and liberty. Any strategy that is likely to succeed in today's world will be one that has the active support and participation of many countries. Consider the financial crisis, which several Western governments initially tried to handle on their own. They seemed to forget about globalization—and nothing is more globalized than capital. Belatedly recognizing this, leaders held the G20 meeting in Washington. This was a good first step (though just a first step). Without a coordinated approach, efforts to patch up the system will fail. The same applies not just to "soft" problems of the future— pandemics, climate change—but to current security challenges as well. The problem of multilateralism in Afghanistan—a place where everyone claims to be united in the struggle—is a sad test case for the future. Thirty-seven nations, operating with the blessing of the United Nations and attacking an organization that has brutally killed civilians in dozens of countries, are still unable to succeed. Why? There are many reasons, but it does not help that few countries involved—from our European allies to Pakistan—are genuinely willing to put aside their narrow parochial interests for a broader common one. Terrorism in South Asia generally requires effective multinational cooperation. Business as usual will produce terrorism that will become usual. National rivalries, some will say, are in the nature of international politics. But that's no longer good enough. Without better and more sustained cooperation, it is difficult to see how we will solve most of the major problems of the 21st century. The real crisis we face is not one of capitalism or American decline, but of globalization itself. As the problems spill over borders, the demand for common action has gone up. But the institutions and mechanisms to make it happen are in decline. The United Nations, NATO and the European Union are all functioning less effectively than they should be. I hold no brief for any specific institution. The United Nations, especially the Security Council, is flawed and dysfunctional. But we needsomeinstitutions for global problem-solving,some mechanisms to coordinate policy. Unless we can find ways to achieve this, we should expect more crises and less success at solving them. In a world characterized by change, more and more countries—especially great powers like Russia and China and India—will begin to chart their own course. That in turn will produce greater instability. America cannot forever protect every sea lane, broker every deal and fight every terrorist group. Without some mechanisms to solve common problems, the world as we have come to know it, with an open economy and all the social and political benefits of this openness, will flounder and perhaps reverse. Now, these gloomy forecasts are not inevitable. Worst-case scenarios are developed so that they can be prevented. And there are many good signs in the world today. The most significant rising power—China—does not seem to seek to overturn the established order (as have many newly rising powers in the past) but rather to succeed within it. Considerable cooperation takes place every day at the ground level, among a large number of countries, on issues from nuclear nonproliferation to trade policy. Sometimes a crisis provides an opportunity. The Washington G20 meeting, for instance, was an interesting portent of a future "post-American" world. Every previous financial crisis had been handled by the IMF, the World Bank or the G7 (or G8). This time, the emerging nations were fully represented. At the same time, the meeting was held in Washington, and George W. Bush presided. The United States retains a unique role in the emerging world order. It remains the single global power. It has enormous convening, agenda-setting and leadership powers, although they must be properly managed and shared with all the world's major players, old and new, in order to be effective. President-elect Obama has powers of his own, too. I will not exaggerate the importance of a single personality, but Obama has become a global symbol like none I can recall in my lifetime. Were he to go to Tehran, for example, he would probably draw a crowd of millions, far larger than any mullah could dream of. Were his administration to demonstrate in its day-to-day conduct a genuine understanding of other countries' perspectives and an empathy for the aspirations of people around the world, it could change America's reputation in lasting ways. This is a rare moment in history. A more responsive America, better attuned to the rest of the world, could help create a new set of ideas and institutions—an architecture of peace for the 21st century that would bring stability, prosperity and dignity to the lives of billions of people.Ten years from now, the world will have moved on; the rising powers will have become unwilling to accept an agenda conceived in Washington or London or Brussels. But at this time and for this man, there is a unique opportunity to use American power to reshape the world. This is his moment. He should seize it. And, specifically new CAFE regulations are coming – (Michael, “34.1 MPG CAFE Standards for 2016 Upheld by U.S. Court of Appeals” http://www.treehugger.com/cars/341-mpg-cafe-standards-2016-upheld-us-court-appeals.html//HH)// The 2012-2016 Corporate Average Fuel Economy standards, better known under the acronym CAFE, mandate reaching 34.1 MPG by 2016 , a number that many big players felt was too high. This led to a challenge in the courts, all the way to the U.S. Court of Appeal. The U.S. Supreme Court decision on health-care will no doubt totally overshadow this less media-friendly legal decision, but the U.S. Court of Appeal actually upheld the federal CAFE standards : The U.S. Court of Appeals in Washington dism issed challenges brought by states led by Texas and major industries including chemical, energy, utility, agriculture and mining companies as well as the National Association of Manufacturer s. The decision is a big win for the Obama administration, which plans to finalize the 2017-25 fuel-efficiency standards and greenhouse gas emissions limits by August. The new rules will hike requirements to 54.5 mpg by 2025. This is great news, because while they are flawed, CAFE standards are what we have now to move things along. They don't say how automakers must increase efficiency, just by how much. The can then figure out what solution works best. They’ll collapse job growth and the Auto Sector (Mike, “How Will Obama’s EPA Regulations Affect the Auto Industry?”, http://www.askheritage.org/how-will-obamas-epa-regulations-affect-the-auto-industryHH) Say goodbye to cars and trucks as you know them. Say hello to a brave new future ushered in by the E nvironmental P rotection A gency. It’s one where the federal government reshapes a major U.S. industry by administrative fiat, all in pursuit of a policy goal that will cost money, jobs, and lives —all to satisfy the left’s environmentalist factions while dishing out taxpayer dollars to an Obama-favored unionized industry. T hat industry is the auto industry, and the Obama Administration is yet again using the mighty fist of the federal government to recast it in its own image. The Washington Post reports that the Obama Administration and the auto industryhave reached agreement on new federal regulations that would raise fuel efficiency standards for cars and light trucks, hitting an average of 54.5 miles per gallon by 2025 —a 40 percent reduction in fuel consumption compared to today. Those new standards, though designed to reduce greenhouse gases, bring with them significant costs. Fo urteen of Michigan’s 15 representatives in Congress —including Democrat Senators Debbie Stabenowand Carl Levin — wrote a letter to the President warning him of the consequences that draconian fuel efficiency standards could have for their state, the home of General Motors, Ford, and Chrysler, citing a report by The Center for Automotive Research which warned that overly stringent standardscould add $10,000 to the cost of a new car. Heritage’s Nicolas Loris explains how those higher costs can lead to job loss : Higher prices reduce demand and force people to hold onto their older vehicles longer. Reduced demand means fewer cars produced, which means automakers have to shed jobs. The Michigan-based consulting firm Defour Group projected that a 56 mpg standard would destroy 220,000 jobs. In addition to lost jobs and costlier cars, forcing automakers to achieve those standards could result in a loss of life. In order to make cars more fuel-efficient, automakers reduce the weight of vehicles. As Reason reports, “a 2002 National Academy of Sciences study concluded that CAFE’s downsizing effect contributed to between 1,300 and 2,600 deaths in a single representative year, and to 10 times that many serious injuries.” And, Auto Recovery is essential to U.S. Economic recovery – the auto industry will drive other sectors and ensure job growth U.S. News 2k12 (“Is the U.S. Auto Industry on Track for a Comeback?,” pg online @ [] //um-ef)// More than three years after bad management, a swooning global economy, and foreign competition gutted the U.S. auto industry, **car makers are revving up for a comeback** at what's likely to be one of the snazziest auto industry shows in years. The North American International Auto Show opened in Detroit this weekend for a nine-day run, and many eyes are on the annual pow-wow for clues about what's in store for 2012. The initial signs look good. The past two months have seen decent sales numbers, a trend that's likely to continue as the jobs outlook strengthens and Americans feel more financially secure, **experts say**. December was a good month for Nissan and especially the "Big Three"—Chevrolet, Chrysler and GM—all of which posted sales increases for the month and year. [Read: New Economic Data Points to Hope in 2012.] "The economy is such that people are feeling a little more comfortable about their job outlook and where they're going," says Bruce Belzowski, research scientist at University of Michigan's Transportation Research Institute. **Economists forecast U.S. auto sales will jump to about 13.5 million in 2012,** up from 12.8 million last year. While 13 or 14 million units sold certainly isn't bad, Belzowski says it's not the 15 or 16 million units auto makers used to enjoy several years ago. **Still, the auto industry's recovery** ** is playing a significant role in bolstering the broader economic recovery in the U** nited **S** tates, **primarily because automotive manufacturing touches so many other areas of the economy**, from manufacturing gas caps to keeping the diner next to the plant open , says Aaron Bragman, senior analyst at IHS Global Insight. **The resurgence in demand also bodes well for the job market.**Auto makers have already re-hired nearly everyone they laid off during the recession, Bragman says, and if demand remains elevated, **companies are likely to hire more to keep up with production needs.** [See today's best photos.] Demand is likely to stay elevated, too. The average age of vehicles in the United States is the oldest it's ever been at more than 10 years old. While buying a new car might be a fun upgrade for some, for others it's becoming a necessity. "In some cases people are looking at [their cars] and saying, 'It's just time, I need to turn the car in,' as opposed to previous cycles where it was largely desire-based and not necessarily need-based," Bragman says. Auto makers are also releasing some new smaller-scale products, which wasn't entirely unexpected. Americans have been downsizing from mega-sized monster trucks for awhile, and car makers are responding by broadening their selection of mid-sized cars and even sprucing up smaller cars with luxury items that used to be only available on larger models. "Everyone has kind of stepped down a notch," Bragman says. Partly due to the earthquake and tsunami that ravaged Japan last year, **it's difficult to say whether U.S. brands can hold onto the market share they captured over the past year**. Furthermore, the landscape of the auto industry has changed dramatically over the past couple of years as carmakers have restructured and cut their losses on underperforming brands. [Read: Unemployment Falls to 8.5 Percent.] "GM canceled four of its eight brands and part of Chevrolet's growth is coming from the fact that the Saturn brand is no longer here," Bragman says. The big question remains whether Japanese brands can make up the market share they lost due to last year's natural disasters**and the increased competitiveness of U.S. brands**. "Everyone is just so much more competitive than they used to be," Bragman says, especially when it comes to U.S. brands, which have completely revamped their business models in some cases. "They've got fully competitive product, they've got fully competitive profitability, and now they've got people actually interested in what they're selling. That's going to be hard for the Japanese." And, a weak economy causes conflict – all emprirical analysis goes our way
 * Greene 6/28 **
 * Brownfield 11 **

Royal 10 – Jedediah Royal, Director of Cooperative Threat Reduction at the U.S. Department of Defense, (Economic Integration, Economic Signaling and the Problem of Economic Crises, Economics of War and Peace: Economic, Legal and Political Perspectives, ed. Goldsmith and Brauer, p. 213-215) Less intuitive is how periods of economic decline may increase the likelihood of external conflict. Political science literature has contributed a moderate degree of attention to the impact of economic decline and the security and defence behaviour of interdependent states. Research in this vein has been considered at systemic, dyadic and national levels. Several notable contributions follow. First, on the systemic level, Pollins (2008) advances Modclski and Thompson's (1996) work on leadership cycle theory, finding that rhythms in the global economy are associated with the rise and fall of a pre-eminent power and the often bloody transition from one pre-eminent leader to the next. As such, exogenous shocks such as economic crises could usher in a redistribution of relative power (see also Gilpin, 1981) that leads to uncertainty about power balances, increasing the risk of miscalculation (Fearon. 1995). Alternatively, even a relatively certain redistribution of power could lead to a permissive environment for conflict as a rising power may seek to challenge a declining power (Werner, 1999). Separately, Pollins (1996) also shows that global economic cycles combined with parallel leadership cycles impact the likelihood of conflict among major, medium and small powers, although he suggests that the causes and connections between global economic conditions and security conditions remain unknown. Second, on a dyadic level, Copeland's (1996. 2000) theory of trade expectations suggests that 'future expectation of trade' is a significant variable in understanding economic conditions and security behaviour of states. He argues that interdependent states are likely to gain pacific benefits from trade so long as they have an optimistic view of future trade relations. However, if the expectations of future trade decline, particularly for difficultto replace items such as energy resources, the likelihood for conflict increases, as states will be inclined to use force to gain access to those resources. Crises could potentially be the trigger for decreased trade expectations either on its own or because it triggers protectionist moves by interdependent states.4 Third, others have considered the link between economic decline and external armed conflict at a national level. Blomberg and Hess (2002) find a strong correlation between internal conflict and external conflict, particularly during periods of economic downturn. They write: The linkages between internal and external conflict and prosperity are strong and mutually reinforcing. Economic conflict tends to spawn internal conflict, which in turn returns the favour. Moreover, the presence of a recession tends to amplify the extent to which international and external conflicts self-reinforce each other. (Blomberg & Hess, 2002. p. 89) Economic decline has also been linked with an increase in the likelihood of terrorism (Blomberg. Hess. & Weerapana. 2004). which has the capacity to spill across borders and lead to external tensions. Furthermore, crises generally reduce the popularity of a sitting government. 'Diversionary theory' suggests that, when facing unpopularity arising from economic decline, sitting governments have increased incentives to fabricate external military conflicts to create a 'rally around the flag' effect. Wang (1990, DeRouen (1995). and Blomberg, Hess, and Thacker (2006) find supporting evidence showing that economic decline and use of force are at least indirectly correlated. Gelpi (1997), Miller (1999), and Kisangani and Pickering (2009) suggest that the tendency towards diversionary tactics are greater for democratic states than autocratic states, due to the fact that democratic leaders are generally more susceptible to being removed from office due to lack of domestic support. DeRouen (2000) has provided evidence showing that periods of weak economic performance in the U nited S tates, and thus weak Presidential popularity, are statistically linked to an increase in the use of force. In summary, recent economic scholarship positively correlates economic integration with an increase in the frequency of economic crises, whereas political science scholarship links economic decline with external conflict at systemic, dyadic and national levels. ' This implied connection between integration, crises and armed conflict has not featured prominently in the economic-security debate and deserves more attention. This observation is not contradictory to other perspectives that link economic interdependence with a decrease in the likelihood of external conflict, such as those mentioned in the first paragraph of this chapter. Those studies tend to focus on dyadic interdependence instead of global interdependence and do not specifically consider the occurrence of and conditions created by economic crises. As such, the view presented here should be considered ancillary to those views. Finally, an increased gas tax is the transition method – it transforms U.S. foreign policy and re-energizes U.S. Diplomacy Turgeon 2k10 (Evan N. Turgeon, Legal Associate at the Cato Institute; J.D.University of Virginia School of Law 2009; B.A. Tufts University 2004, “Triple-Dividends: Toward Pigovian Gasoline Taxation,” Journal of Land, Resources, & Envir onmental Law 2010, pg lexisum-ef) Advantage Two: Transition First, renewable energy development is inevitable globally – the question is whether the U.S. will be a global leader Cuttino 2k12 (Phyllis Cuttino Director, Pew Clean Energy Program “A Bright Future for Renewable Energy,” pg online @ [] //um-ef)// The current market for the renewable energy sector in the United States and around the world is a mix of challenge and opportunity. However, the long-term future of clean energy is bright. According to our recent report, "Who's Winning the Clean Energy Race? 2011 Edition," last year saw record private investments globally. And the United States received more investments for clean energy than any other nation. These investments resulted in record deployment levels -- 83.5 gig watts of clean generating capacity overall, including an unprecedented 30 gig watts of solar. B ut like other emerging high-technology industries before it, the clean-energy sector is going through a period of profound transition. **The industry faces powerful financial and policy cross currents**. The most important long-term dynamic in this sector **is falling prices****. ** Both wind and solar have experienced sustained and dramatic price declines. Solar module prices dropped 50 percent in 2011. Wind prices were down 10 percent. Lithium-ion batteries used in electric vehicles are down 30 percent over the past three years and fell 14 percent just last year. These price declines are good news for consumers and help explain last year's record deployments. Yet falling prices are putting manufacturers through a period of turmoil in the United States and elsewhere. Many are hard-pressed to make a profit and scrambling to remain viable. A number will fail, just as the more than 100 automakers in the early 20th century were whittled down to only a few American auto producers. **This turmoil facing clean energy manufacturers is exacerbated by policy uncertainty in the most established and mature markets**. Financial incentives in Europe are being curtailed in the push for budget austerity. In the United States, a variety of initiatives, passed as part of the stimulus package, expired at the end of 2011, and the production tax credit that has guided investors in wind projects is set to conclude at the end of this year. But these challenges will pass, and clean energy will continue its inexorable march forward -- pushing innovation into an energy sector that has not seen much in the way of new technologies for more than 100 years. Renewable power will soon be cost-competitive. Indeed, a range of financial and technical experts expect solar and wind to compete favorably without subsidies of any kind within this decade and perhaps in the next five years. Similarly, U.S. policy uncertainty will not deter other markets from flourishing. China, India, Brazil, and other emerging economies have strong and consistent clean energy policies to encourage private investment in and deployment of clean energy. These are the markets where most of the 2 billion people without modern energy services live and where demand growth will be greatest in the next 20 to 30 years. Clean energy offers African countries, for example, the opportunity to provide electricity to households and communities without transmission wires, just as cell phones allowed that continent to leapfrog landline phones. Residential solar already is the cheapest energy option in many parts of the world. **For American policymakers, the question is not whether clean energy will be part of the world's energy future**. It is and will be. **The question is whether the United States will capitalize on its advantages in clean energy innovation and position itself to use, produce, and sell them to consumers looking for safe, clean, affordable energy options in the future.** The hearing this week on the proposed Clean Energy Standard (CES) is an important step. Although the legislation is unlikely to move to the Senate floor for debate, a CES is the type of long-term policy needed in this country. We have a choice. Continue our current complacency and watch others seize the economic and national security benefits of clean energy, such as job growth and competitiveness. Or renew the production tax credit, pass a clean energy standard, and support innovators, entrepreneurs, and industry in develop ing **the world's most advanced, cost-competitive clean energy technologies for Americans to use and export around the world**. And, failure to provide a consistent price signal ensures the U.S. falls behind in renewable leadership Bloomberg 4/12/12 (“U.S. Clean Energy Policies Risk Losing Lead Over China,” pg online @ http://www.bloomberg.com/news/2012-04-12/u-s-clean-energy-policies-risk-losing-lead-over-china.html um-ef) The plan is the requisite price signal – investors will jump at renewables and away from oil at the plan’s inception Abelkop 2k9 (Adam, J.D., University of Iowa College of Law, 2010; B.A., Wake Forest University, PHd Student @ Univ of Indiana, “Why the Government Should Drink Your Milkshake: The Case for Restructuring the Federal Gas Tax,” The Journal of Corporation Law Winter, 2009, 35 Iowa J. Corp. L. 393 pg lexis//um-ef)// A. The Need for a Price Signal **Volatile oil prices and uncertainty** in the petroleum market **inhibit investment** **in and development of** desperately needed sources of **clean, renewable energy**. n167 The credit crisis that began in late 2008 compounds the problem. n168 Businesses and venture capitalists that were previously interested in investing in renewables are shying away from that market. n169 Worldwide financing of clean-energy projects fell by 25% in the third quarter of 2008. n170 Tight financing is especially problematic for the renewable energy companies because many of those clean-tech companies are small firms that operate on the margins. n171 Before they risk their capital on developments in clean energy technology - especially with small firms that could easily go bust - investors are waiting for ** a price signal ** from the petroleum and gasoline marketthat will provide them with reasonable certainty that their investments will pay off. n172 [*411] Renewable tech nology is primarily used in electricity generation, so it may seem odd that fluctuations in the price of transportation fuel would affect investments in renewables. **There are, however, several connections between oil and renewable energy technology**. n173 As a result, the price of oil exerts a degree of influence over investment decisions in the renewable energy industry. n174 For example, plug-in hybrid-electric vehicles are among the most promising new technologies in the transportation sector. n175 Many experts believe that electrification of the transport sector is "the only possible, practical response to the peaking of our traditional forms of energy ." n176 In addition, some energy market analysts describe "the connection between oil and alternative energy [as] largely psychological ... ." n177 While the price of oil may not be the largest factor that influences investment decisions concerning electricity-generating renewables, it nevertheless **seems that investors link oil to renewables by seeing the price of oil as a gauge of the general consumer appetite for alternative energy**tech nologies: "Alternative-energy investors ... need to be aware of the price of a commodity like oil - **the higher it goes the more attractive managing solar and wind farms becomes** ... ." n178 Ultimately, investors make decisions based on consumer appetite. n179 Dr. Nathan Lewis, an energy chemist at the California Institute of Technology, explains that most consumers do not care where their energy comes from: "electricity is electricity, no matter how it is generated." n180 The difference to the consumer is in the cost. The empirical evidence indicates that high fuel prices cause widespread reductions in petroleum consumption. n181 High gas oline p rices influence people to drive less, to carpool, to bike or walk, and to choose homes closer to their workplaces. n182 As oil prices were increasing throughout 2007, the Toyota Prius hybrid outsold the Ford Explorer in the U.S. market. n183 Without high gasoline prices, drivers have no incentive to make the "tough" choice to switch to a smaller vehicle with a better fuel economy as opposed to a comparatively large vehicle like an SUV. n184 The problem is that behavioral changes such [*412] as these take a long while to stick. Choices such as the location of a home or which type of car to purchase are significant long-term decisions. For Americans to make these decisions with their energy bills in mind, they have to see high gas prices and believe that they will remain high over the long-term. n185 This began to happen when the price of gasoline crept up to $ 4 per gallon. n186 The pressure to make ecologically friendly choices, however, fades when the price of fuel retreats. n187 The same holds true for investor behavior. It would be perverse to expect a business to make a long-term investment in a new technology unless that business could be reasonably certain that there would be a sure market for the new technology when it becomes commercially available. n188 Thomas Friedman explains, " lingering uncertainty about the long-term price of oil is why some of our biggest energy companies, the kind you want to be "all in' on clean-tech innovation, are not all-in ." n189 That the price of oil reached $ 147 per barrel for a brief period in 2008, though, is not enough for businesses and investors to be certain that crude prices will remain high over the long-term. n190 After all, prices toppled to below $ 40 per barrel in December 2008 and were still at around $ 40 per barrel in February 2009. n191 As of this writing, oil prices have surpassed $ 80 per barrel. n192 **Price volatility is why the petroleum market, left to its own devices, does not send a sufficient price signal:** ""Price fluctuations are not the same as high prices.'" n193 The price increases that we witnessed over the first half of 2008 did not last long enough to permanently shift petroleum consumption or alter consumer appetite in favor of eco-friendly renewable technologies. n194 The bottom line is **that investors and businesses need price certainty to be confident enough to take investment risks on renewables.** Ultimately then, what is needed to encourage more responsible choices in terms of behavior and investment is a sustained period of foreseeably high fuel prices. Because the petroleum market sends mixed price signals, **it falls on the government to provide the market with the appropriate signals that are necessary to encourage the [*413] widespread financing of clean, renewable energy projects**. n195 ** A price floor and variable tax on gasoline would signal to businesses and investors that renewable energy technologies will be competitive with traditional fossil fuels over the long-term **. n196 Because Americans would be relatively certain that they will face increased energy costs, a price floor would compel them to incorporate those costs into their personal budgets and consumption decisions. The result would be **a dramatic decline in oil consumption** that would lower the exposure of the U.S. economy to an oil supply shockand reduce its contribution to global climate change. The following Part lays the groundwork for how the government should administer such a policy. n197 And, Renewable Transition spurs innovation – creates the World’s First Green Hegemon Locking-in U.S. Dominance and ensuring U.S. Global Energy Advantages Klarevas 2k9 (Louis, Professor, Center for Global Affairs, New York University “Securing American Primacy While Tackling Climate Change: Toward a National Strategy of Greengemony,” pg online @ [] ghs-ef) As national leaders from around the world are gathering in Copenhagen, Denmark, to attend the United Nations Climate Change Conference, the time is ripe to re-assess America's current energy policies - but within the larger framework of how a new approach on the environment will stave off global warming and shore up American primacy. By not addressing climate chang e more aggressively and creatively, the U nited S tates is squandering an opportunity to secure **its global primacy** for the next few generations to come. To do this, though, the U.S. must **rely on innovation** to help the world escape the coming environmental meltdown. Developing the key technologies that will save the planet from global warmingwill allow the U.S. **to outmaneuver potential great power rivals seeking to replace it** **as the** international system's **hegemon****. ** But the greening of American strategy must occur soon. The U.S., however, seems to be stuck in time, unable to move beyond oil-centric geo-politics in any meaningful way. Often, the gridlock is portrayed as a partisan difference, with Republicans resisting action and Democrats pleading for action. This, though, is an unfair characterization as there are numerous proactive Republicans and quite a few reticent Democrats. The real divide is instead one between realists and liberals. Students of realpolitik, which still heavily guides American foreign policy, largely discount environmental issues as they are not seen as advancing national interests in a way that generates relative power advantages vis-à-vis the other major powers in the system: Russia, China, Japan, India, and the European Union. Liberals, on the other hand, have recognized that global warming might very well become the greatest challenge ever faced by mankind. As such, their thinking often eschews narrowly defined national interests for the greater global good. This, though, ruffles elected officials whose sworn obligation is, above all, to protect and promote American national interests. What both sides need to understand is that by becoming a lean, mean, green fighting machine, the U.S. can actually bring together liberals and realists to advance a collective interest which benefits every nation, while at the same time, securing America's global primacy well into the future. To do so, the U.S. must re-invent itself as not just your traditional hegemon, but as history's first ever **green hegemon**. Hegemons are countries that dominate the international system - bailing out other countries in times of global crisis, establishing and maintaining the most important international institutions, and covering the costs that result from free-riding and cheating global obligations. Since 1945, that role has been the purview of the United States. Immediately after World War II, Europe and Asia laid in ruin, the global economy required resuscitation, the countries of the free world needed security guarantees, and the entire system longed for a multilateral forum where global concerns could be addressed. The U.S., emerging the least scathed by the systemic crisis of fascism's rise, stepped up to the challenge and established the postwar (and current) liberal order. But don't let the world "liberal" fool you. While many nations benefited from America's new-found hegemony, the U.S. was driven largely by "realist" selfish national interests. The liberal order first and foremost benefited the U.S. With the U.S. becoming bogged down in places like Afghanistan and Iraq, running a record national debt, and failing to shore up the dollar, the future of American hegemony now seems to be facing a serious contest : potential rivals - acting like sharks smelling blood in the water - wish to challenge the U.S. on a variety of fronts. This has led numerous commentators to forecast the U.S.'s imminent fall from grace. Not all hope is lost however. With the impending systemic crisis of global warming on the horizon, the U.S. again finds itself in a position to address a transnational problem in a way that will benefit both the international community collectively and the U.S. selfishly. The current problem is two-fold. First, the competition for oil is fueling animosities between the major powers. The geopolitics of oil has already emboldened Russia in its 'near abroad' and China in far-off places like Africa and Latin America. As oil is a limited natural resource, a nasty zero-sum contest could be looming on the horizon for the U.S. and its major power rivals - a contest which threatens American primacy and global stability. Second, converting fossil fuels like oil to run national economies is producing irreversible harm in the form of carbon dioxide emissions. So long as the global economy remains oil-dependent, greenhouse gases will continue to rise. Experts are predicting as much as a 60% increase in carbon dioxide emissions in the next twenty-five years. That likely means more devastating water shortages, droughts, forest fires, floods, and storms. In other words, if global competition for access to energy resources does not undermine international security, global warming will. And in either case, oil will be a culprit for the instability. Oil arguably has been the most precious energy resource of the last half-century. But "black gold" is so 20th century. The key resource for this century will be green gold - clean, environmentally-friendly energy like wind, solar, and hydrogen power. Climate change leaves no alternative. And the sooner we realize this, the better off we will be. What Washington must do in order to avoid the traps of petropolitics is to convert the U.S. into the world's first-ever green hegemon. For starters, the federal government must drastically increase investment in energy and environmental research and development (E&E R&D). This will require a serious sacrifice, committing upwards of $40 billion annually to E&E R&D - a far cry from the few billion dollars currently being spent. By promoting a new national project, the U.S. could develop new technologies that will assure it does not drown in a pool of oil. Some solutions are already well known, such as raising fuel standards for automobiles; improving public transportation networks; and expanding nuclear and wind power sources. Others, however, have not progressed much beyond the drawing board: batteries that can store massive amounts of solar (and possibly even wind) power; efficient and cost-effective photovoltaic cells, crop-fuels, and hydrogen-based fuels; and even fusion. Such innovations will not only provide alternatives to oil, they will also give the U.S. **an edge in the global competition for hegemony**. If the U.S. is able to produce technologies that allow modern, globalized societies to escape the oil trap, those nations will eventually have no choice but to adopt such technologies. And this will give the U.S. a tremendous economic boom, while simultaneously providing it with means of leverage that can be employed to keep potential foes in check. The bottom-line is that the U.S. needs to become green energy dominant as opposed to black energy independent - and the best approach for achieving this is to promote a national strategy of greengemony. That solves Nuclear Conflict Gray, Professor of International Politics and Strategic Studies at the University of Reading, and founded of the National Institute for Public Policy, 2K4 (Colin, “The Sheriff: America’s Defense of the New World Order, pg. 6-10) World order is neither self-enforcing nor is it comprehensively enforceable. Nonetheless, every such “order” requires a sheriff, or some other agent of discipline. In the modern European, then world, system, which is to say since the late eighteenth century, the ordering mechanism was the balance of power, with occasional corrections imposed by war. Order is the prime virtue; it is the essential prerequisite for security, peace, and possibly justice. Disorder is the worst condition. Because this study is not deterministic, it is possible that the necessary rule-keeping job might be abandoned and not resumed for a while. Even in that unhappy event, my argument does not sink. Rather does the world cope as best it can in the absence of superior, and by and large legitimate, force, until such force reappears. Periods of anarchy, or at best of only very weak international governance, are far from unknown historically. Invariably they invite ambitious opportunists to try their luck. That development may, or may not, suffice to awake the sleeping benign giant, should such be conveniently available to be stirred from slumber. Every condition of international order works for the particular benefit of some countries and the interests more that others, and needs defending. The alternatives to an American-led international order are just possibly eventual leadership by some other polity or coalition (probably Chinese, though possibly European, led), or, more likely, a lengthy period with no one wearing the sheriff’s badge. In that unwelcome event, every predatory regional and local power, many a dissatisfied ethnic or religious minority, most probably would chance its arm and seek its own destiny, by violence if need be. Violent struggle is all but essential to the success of the process of nation building. No doubt there are many ways in which order for security, hopefully promoting peace and justice, might be established and maintained. In the life of the modern state’s system, which is to say from the Treaty of Westphalia in 1684 to the present day (though many now proclaim the demise of this system), in practice only one ordering mechanism has been available: the balance of power. The dying embers of that hoary approach limed on even until 1991, when many of its American aficionados could still be found muttering about “the strategic balance,” while through the 1990s many a serious reference still was made to that abominable consequence of Cold War military competition, a condition of stability keyed to the mutuality of assured destruction (MAD). But, today there is no strategic balance, central or otherwise, and there is no political context of hostility to provide meaning to military rivalry between the United States and the new Russian Federation. There is no balance of power serving as the mainstay, the organizing architecture, of the current world order. What we have instead was flagged in the 1995 as a strong desideratum by the classical historian, Donald Kagan. What seems to work best, even though imperfectly, is the possession by those states who wish to preserve the peace of the preponderant power and of the will to accept the burdens and responsibilities required to achieve that purpose. As written, Kagan’s words could just about fit the folly of the theory of collective security. Of Course, he has no such noble nonsense in mind. What he is saying is that peace has to be kept, actively, and that it is best kept by a preponderance, not by an ever contestable balance, of power. Kagan’s historical judgment will serve as the test for this sermon on security. In principle there is both good and bad news in Kagan’s claim. It is good news that his lifetime’s ruminations on peace and war have yielded definite advice. Many academics would be uncomfortable writing as boldly as does Kagan. The bad news is that to the best of our knowledge, there is no hidden hand of history commanded to ensure that only commercially minded popular democracies shall inherit the mantle of preponderant power. It was never probable, but that power at century’s close might have been Nazi Germany or the USSR. Fortunately, chance favored civilizational merit for once, and the only candidate for sheriff today is the United States, a fact which is our second theme. The United States is the, indeed is the only, essential protecting power for the current world order. Again, this is not to be deterministic. Although there are no other bidders for this crown at present, it does not follow that the United States is condemned to play this role. After all, American world leadership in Paris 1919 was succeeded post haste by a scuttle from many potential international obligations. Americans today could elect to withdraw from the outside world, insofar as they could in political-military ways. They would hope that the civilizational offense given by soft power of their now globally beamed culture would not be found unduly provocative abroad. Whether The Great Satan, as Iranian spokespeople have delighted in calling the United States, would be allowed to hunker down in peaceful sanctuary in North America, we should doubt. Still, it could be tried. After September 11, 2001, isolationist sentiment temporarily has lost much of its appeal. We may not be much interested in terrorism, but it would appear that terrorism is interested in us. For good or ill, we are what we are. Exactly what this is has been explained in no uncertain terms by Henry Kissinger in the opening lines of his book, Does America Need a Foreign Policy? No prizes are awarded for guessing that his question is strictly rhetorical. Kissinger proclaims that: At the dawn of the new millennium, the United States is enjoying a preeminence unrivalled by even the greatest empires of the past. From weaponry to entrepreneurship, from science to technology, from higher education to popular culture, America exercises an unparalleled ascendancy around the globe. During the last decade of the twentieth century, America’s preponderant position rendered it the indispensable component of international stability. The condition of unchallenged, indeed unchallengeable, primacy will not endure -it is not strategic history’s “last move”- but while it does the U nited S tates **is the only candidate for sheriff**. If America ns should decline the honor, they are at least uniquely well equipped to ensure that ** no one else could possibly succeed ** in that informal office. As Donald Kagan provided our basic text, quoted under the first point above, so it is only fitting that he should also be allowed to sound the warning bell. Kagan advises that: Unexpected changes and shifts in power are the warp and woof of international history. The current condition of the world, therefore, were war among major powers is hard to conceive because one of them has overwhelming military superiority and no wish to expand, will not last. Quite so. However, historians, perhaps especially ancient historians, should be expected to take the long view. And in the long view everything crumbles. But a suitable vision for the inspiration of policy, judicious choice of policy goals, and competence in strategy, should allow Americans to prolong their current strategic moment, as a later point makes explicit to be the sheriff of the current world order is a thankless role. American power may be necessary to restore such order as may be restorable, but Americans will not be loved, or even much appreciated, as a consequence. The rest of the world will be envious, fearful, and resentful, all the while seeking to use the leverage of American power for local purposes. There is no term extant that precisely captures the emerging U.S. role as sheriff of world order. For the first time since the mid-1960s, it has begun to be fashionable to refer to American policy and tasks as imperial. Andrew Bacevich, for one thoughtful example, suggest that “the preeminent challenge facing the United States in the twenty-first century is not eradicating terror but managing the informal American empire acquired during the course of the past century.” Empire, imperium even better, and hegemony, for all their popularity and at least partial suitability, carry baggage that can be distracting. Unless we are careful, such concepts themselves become part of the problem in the effort to conduct focused debate on U.S. policy and strategy. Despite the grounds for unease, we cannot deny the reality of common usage. For example, a review essay in Foreign Affairs opens with this claim: “The fact of America’s empire is hardly debated these days.” Allowing for the hyperbole and certain imprecision of meaning, still it is noteworthy that the author, Thomas Donnelly, feels able to make such a bold statement. I prefer to think of the United States as the sheriff of the current world order, for reasons both of cultural fit concept and of tolerable accuracy. Naturally, this American role is largely self-appointed, though it can enjoy added dignity when it is blessed formally by majority votes in multinational institutions. For example, the Security Council of the United Nations licensed the United States to lead military action against Iraq in 1990-91, while the war against Yugoslavia over its “ethnic cleansing” of Kosovo in 1999 was a collective NATO, though not a UN undertaking. Because world politics comprises a distinctly immature political system, we have to be somewhat relaxed about some of the legal niceties. To call the United States the sheriff of the current world order is both description and prescription. This lawman role derives most essentially from the contemporary distribution of power, which so markedly favors the American superstate. Beyond that derivation, however, the role of sheriff is made easier to sustain by the more or less willing, though variably grudging, acquiescence of most countries. Sheriff is of course a metaphor. By its use I mean to argue that the United States will act on behalf of others, as well as itself, undertaking some of the tough jobs of international security that no other agent or agency is competent to perform. The American sheriff serves itself by serving the world selectively. This role requires the clearest of foreign policy explanations, lest it descend into strategic opportunism, or at least appears to do so. U.S. material and spiritual resources are great, but not inexhaustible. They should not be expended casually in the pursuit of goals of only marginal national interest. Notwithstanding September 11 and its aftermath, the jury is out, and is likely to stay out awhile longer, on whether American society will tolerate the sheriff’s role as specified here, expect in contexts highly specific to obvious American interest. Those contexts may not include some which the world order will need a prudent sheriff to influence coercively (if not necessarily with force). The United States is not, and should not and cannot be, the world’s policeman vis a vis any and every disturbance. The actions of this American sheriff of order are guided frankly by a national interest discriminator. The U.S. President needs to know: what has happened (or plausibly might happen); whether it matters to the United States, and if so, how much; what, if anything, he can do about it; and what cost, of all kinds, are likely to attach to action, or inaction. If the United States does not serve itself through its peacemaking behavior, its career as sheriff will be brief indeed. Altruism has a thin record in strategic history and, we must assume, an unpromising future. That is just the way it is in world politics. However, if the United States seeks to serve only itself, and rides roughshod over the interests of others, again its career as functional sheriff will be brief. The world at large will discern scant reason to cooperate with the United States, if American statecraft is crassly applied strictly on behalf of narrowly American interests. At the level of principle, if not always in attempted application, some of the critics of American so called unilateralism are correct. The United States often is more powerful when it can act with others. This is not an invariable rule. By extension, when the sheriff departs the town he has cleansed, he wants to leave it in the hands of right-minded and hopefully capable citizens. One of the indispensable keys to success in this emerging era of American guardianship is for the maximum number of countries, and extra-national interests, to believe that the United States is protecting a world order in which they all have a vital, if sometimes differential, stake. People may resent the American sheriff, and naturally be residually suspicious of American motives. But they should be prepared to welcome American ordering activity which benefits all potential victims of disorder. Americans do not need to be loved. It is sufficient to be respected and, perhaps, appreciated for the self-assumed lawman role. The United States has an imperial history, of a sort, but has never acquired much of an imperial mindset. Commentators may discover new forms of imperialism to cover current American attitudes and behavior, and perhaps, but only perhaps, there is some small merit in the exercise. Americans are apt to view the world though missionary lenses. American is an idea, a civilization even (to stretch conceptual domain), rather than just another state. Globalization, beneath the hyperbole, is seen in America and elsewhere as equating approximately with Americanization. Whether or not, or to what extent, that is true is not a prime concern here. Instead, our gaze is fixed upon America’s role as chief protector, guardian, or sheriff of this new world with its globalizing flows of information, people, and goods. First and foremost, the United States is the agent of its own national interest, an interest that Washington, on a prudent day, judges vitally bound up with a particular idea of world order. The national interest discriminator to which reference has been made, allows a fairly reliable four-way categorization of issues. Issues can be of survival character: they can be vital: they can be major: or they can be “other.” Survival issues must be fought for. Vital interests should be defended forcefully. Major interests might possibly be protected militarily. “Other” interests should not attract the U.S. cavalry – unless, that is, the cost is believed to be extraordinarily low (but beware of the surprise that friction and chance in war may throw your way.) The political context, or perhaps the timing, may multiply the significance of matters that otherwise would be of little concern to Washington (e.g. almost anything in the Balkans). A useful approach to understanding the U.S. role as sheriff is by means of another four-way split. Given the contemporary, and at least short-term predictable, distribution of power (which admittedly is different in its political-military, economic, and cultural dimensions), the objectively desirable U.S. role typically is as plain as it is not yet acceptable politically to proclaim out loud. With respect to protecting the world order, my seconf four-way split, tied inalienably to the four-way national interest discriminator, is the following: There are problems that only the United States can address in hopes of achieving decisive success; there are problems that the United States should stand a reasonable prospect of meeting and at least alleviating; there are problems concerning which the United States should be expected to fare poorly; and finally, there are problems that the United States has absolutely no plausible prospect whatsoever of alleviating, let alone of resolving (e.g., resucuing and restoring certain failed states). It may be needless to add that in most cases the active support of some friends and allies will, on balance, be a significant, though rarely essential, benefit. The U nited S tates could pick up its military ball and go home. It could choose to rely for world order on the hidden hand of universal commercial self-interest somewhat guided by such regional and local balances and imbalances of power as may be extant or might emerge. In effect, frequently this would translate **as a green light** for regional bullies to mark out their territories (and sea space and air space). Thus far, the contemporary U nited S tates is showing no persuasive evidence of an inclination to bring itself home as a political military influence. The issue is not whether America’s skills in statescraft are fully adequate for the sheriff role (whose would be?). Rather, it is whether there is to be a sheriff at all. If the U nited S tates declines the honor, or takes early retirement, there is no deputy sheriff, waiting, trained and ready for promotion. Furthermore, there is no world-ordering mechanism worthy of the name which could substitute for the authority and strength of the American Superpower. At present there is no central axis of a balance of power to keep order, while the regional balances in the Middle East and South and East Asia are as likely to provoke as to cool conflict – and conflict with weapons of mass destruction ( WMD ) at that. And, a gas tax gives the U.S. comparative technology advantages over international competitors Turgeon 2k10 (Evan N. Turgeon, Legal Associate at the Cato Institute; J.D. University of Virginia School of Law 2009; B.A. Tufts University 2004, “Triple-Dividends: Toward Pigovian Gasoline Taxation,” Journal of Land, Resources, & Envir onmental Law 2010, pg lexis//um-ef)// 1. Shifting Terms-of-Trade **Taxing gasoline would alter the terms of international trade in favor of the U** nited **S** tates. n120 Decreasing the domestic demand for gasoline would make alternative domestic sources of transportation comparatively more attractive to American consumers, causing the foreign oil industry to contract **and domestic alternative fuel industries to expand**. **As a result, American industries and products would become more competitive vis-a-vis foreign competitors**. n121 In response, OPEC would cut oil prices. This "terms of trade effect" would shift part of the cost of gasoline taxes onto foreign producers of oil n122 and result in more money spent domestically, stimulating economic activity. Therefore, the economically-optimal fuel tax may be greater than one merely intended to compensate for the environmental harm caused by fossil fuel combustion. n123 The national security of the U nited S tates would benefit from this trade effect as a result of the negative effects that decreased oil revenue would likely have on exporters of oil.Lower profits reduce an oil exporting regime's ability to exert its will internationally and may weaken its control domestical ly. **This produces a relative benefit for the United States**, whose international interests conflict with certain oil exporters, such as Russia, Venezuela, and Iran. With respect to Iran, for [*164] example, lower oil prices may increase pressure for economic reform, "potentially putting pressure on the clerical governing elite to loosen its grip." n124 The U nited S tates might capitalize on oil exporters' economic weaknesses by establishing aid and trade relationships in exchange for concessions on military and nuclear policies disadvantageous to the U nited S tates. n125 Under pressure to maintain their citizens' standard of living, Middle Eastern regimes would likely liberalize social policies in an effort to diversify their economies. Resulting industries would expand economic opportunities for youth in these countries, thereby reducing the attractiveness of terrorist groups, which depend on widespread discontent and unemployment for recruitment. n126 2. Lower Military Spending Geopolitical changes would, in turn, provide politically-attractive opportunities to reduce the ever-growing military expenditures of the U nited S tates. n127 Although "one cannot attribute all expenditures in the Middle East to defending oil supplies[,]" n128 preserving American access to inexpensive oil is of the utmost importance to the United States. Estimate of annual military expenditures toward security oil supplies vary widely but are enormous by any estimate, averaging in the tens of billions of dollars per year when the nation is not at war. n129 However, if the military were not so obligated, the United States could reduce significantly its military presence in other countries or at least deploy its military resources in a more cost-effective manner. This conclusion follows from a basic mathematical insight. Suppose that you maximize a function of several variables subject to a constraint on some of the variables. Then the constraint is removed and the function is maximized again. The maximal value of the function must be higher in the latter case than in the former. n130 [*165] Freed from its addiction to oil, the United States' national security outlook stands to benefit enormously from higher federal gasoline taxes. And, that is independently essential to prevent a violent U.S. lash-out – risking power wars Goldstein 7 — Avery Goldstein, David M. Knott Professor of Global Politics and International Relations at the University of Pennsylvania, Associate Director of the Christopher H. Browne Center for International Politics, Senior Fellow at the Foreign Policy Research Institute, holds a Ph.D. from the University of California-Berkeley, 2007 (“Power transitions, institutions, and China's rise in East Asia: Theoretical expectations and evidence,” Journal of Strategic Studies//, Volume 30, Number 4-5, August-October, Available Online to Subscribing Institutions via Taylor & Francis Online, p. 647-648)// Two closely related, though distinct, theoretical arguments focus explicitly on the consequences for international politics of a shift in power between a dominant state and a rising power. In War and Change in World Politics, Robert Gilpin suggested that peace prevails when a dominant state’s capabilities enable it to ‘govern’ an international order that it has shaped. Over time, however, as economic and technological diffusion proceeds during eras of peace and development, other states are empowered. Moreover, the burdens of international governance drain and distract the reigning hegemon, and challengers eventually emerge who seek to rewrite the rules of governance. As the power advantage of the erstwhile hegemon ebbs, it may become desperate enough to resort to theultima ratio of international politics, force, to forestall the increasingly urgent demands of a rising challenger. Or as the power of the challenger rises, it may be tempted to press its case with threats to use force. It is the rise and fall of the great powers that creates the circumstances under which major wars, what Gilpin labels ‘hegemonic wars’, break out.13 Gilpin’s argument logically encourages pessimism about the implications of a rising China. It leads to the expectation that international trade, investment, and technology transfer will result in a steady diffusion of American economic power, benefit ing the rapidly developing states of the world, including China. As the US simultaneously scurries to put out the many brushfires that threaten its far-flung global interests (i.e., the classic problem of overextension), it will be unable to devote sufficient resources to maintain or restore its former advantage over emerging competitors like China. While the erosion of the once clear American advantage plays itself out, the US will find it ever more difficult to preserve the order in Asia that it created during its era of preponderance. The expectation is an increase in the likelihood for the use of force – either by a Chinese challenger able to field a stronger military in support of its demands for greater influence over international arrangements in Asia, or by a besieged American hegemon desperate to head off further decline. Among the trends that alarm those who would look at Asia through the lens of Gilpin’s theory are China’s expanding share of world trade and wealth (much of it resulting from the gains made possible by the international economic order a dominant US established); its acquisition of technology in key sectors that have both civilian and military applications (e.g., information, communications, and electronics linked with to forestall, and the challenger becomes increasingly determined to realize the transition to a new international order whose contours it will define. the ‘revolution in military affairs’); and an expanding military burden for the US (as it copes with the challenges of its global war on terrorism and especially its struggle in Iraq) that limits the resources it can devote to preserving its interests in East Asia.14 Although similar to Gilpin’s work insofar as it emphasizes the importance of shifts in the capabilities of a dominant state and a rising challenger, the power-transition theory A. F. K. Organski and Jacek Kugler present in The War Ledger focuses more closely on the allegedly dangerous phenomenon of ‘crossover’– the point at which a dissatisfied challenger is about to overtake the established leading state.15 In such cases, when the power gap narrows, the dominant state becomes increasingly desperate. Though suggesting why a rising China may ultimately present grave dangers for international peace when its capabilities make it a peer competitor of America, Organski and Kugler’s power-transition theory is less clear about the dangers while a potential challenger still lags far behind and faces a difficult struggle to catch up. This clarification is important in thinking about the theory’s relevance to interpreting China’s rise because a broad consensus prevails among analysts that Chinese military capabilities are at a minimum two decades from putting it in a league with the US in Asia.16 Their theory, then, points with alarm to trends in China’s growing wealth and power relative to the U nited S tates, but especially looks ahead to what it sees as the period of maximum danger – that time when a dissatisfied China could be in a position to overtake the US on dimensions believed crucial for assessing power. Reports beginning in the mid-1990s that offered extrapolations suggest ing China’s growth would give it the world’s largest gross domestic product ( GDP aggregate, not per capita) sometime in the first few decades of the twentieth century fed these sorts of concerns about a potentially dangerous challenge to American leadership in Asia.17 The huge gap between Chinese and American military capabilities (especially in terms of technological sophistication) has so far discouraged prediction of comparably disquieting trends on this dimension, but inklings of similar concerns may be reflected in occasionally alarmist reports about purchases of advanced Russian air and naval equipment, as well as concern that Chinese espionage may have undermined the American advantage in nuclear and missile technology, and speculation about the potential military purposes of China’s manned space program.18 Moreover, because a dominant state may react to the prospect of a crossover and believe that it is wiser to embrace the logic of preventive war and act early to delay a transition while the task is more manageable, Organski and Kugler’s power-transition theory also provides grounds for concern about the period prior to the possible crossover. 19 pg. 647-650 Advantage three: Dependence Oil Price Spikes are coming - Peak oil inevitable by 2015
 * Significantly increasing federal taxes on gasoline would generate results** ** vastly superior to those produced by current energy policies ** . While politically unpopular, such Pigovian taxes promote economic efficiency . In so doing, a meaningful federal gasoline tax has the potential to yield a triple-dividend by [*159] simultaneously improving the United States' economy, furthering national security, and inhibiting climate change. n85 The scientific consensus on global warming accepts that reducing greenhouse gas emissions from fossil fuel combustion is necessary to stem the tide of global warming, and that imposing Pigovian taxes would further this goal. However, I argue that such taxes, by reducing domestic oil demand and consumption, would benefit the United States' national security outlook and economy as well. Importantly, these benefits would increase the United States' relative power in the world, and would accrue even if fuel taxes were imposed unilaterally. A. Economic Efficiency Many commentators have noted that raising gasoline taxes would increase economic efficiency by forcing drivers to realize the true costs of their driving. Historically, government policy has permitted Americans to externalize the true costs of their driving onto the national commons, which lowers the cost of driving and increases the amount of driving done. Recognition of these inefficient and unfair externalities has prompted proposals to force drivers to internalize the true cost of driving. n86 1. The Theory of Pigovian Taxation In his 1920 book, The Economics of Welfare, economist Arthur Pigou recommended imposing taxes on polluters to force them to internalize such costs. n87 Since prices act as a signaling mechanism to consumers, n88 the easiest way to reduce excess consumption is to raise prices, and the easiest way to raise prices is to impose a tax. A "Pigovian" tax would increase the cost of driving, and thereby reduce the amount of driving done to the optimal level: where marginal cost equals marginal benefit. A Pigovian gas tax thus has the potential to improve societal welfare. It seems that Pigovian fuel taxation would prove the best method of promoting economic efficiency. Although Pigovian environmental taxes are generally criticized for providing only a "second-best" solution to environmental externalities, n89 it appears that Pigovian gasoline taxation would provide close to a "first best" solution to the economic, national security, and climate change[*160]externalities discussed here. It would simultaneously address the volatile price of gasoline that produces economic problems, the high American consumption of oil that requires high national security expenditures, and the carbon emissions responsible for climate change. n90 The principal economic shortcoming of Pigovian fuel taxation is that it "discourages vehicle use uniformly, ignoring differences in emission rates." n91 As a consequence, it does not perfectly maximize emission reductions. However, higher fuel taxes are fair because the costs of driving would accrue primarily to drivers in proportion to the driving each does, not to all American citizens. n92 Moreover, "the beauty of the fuel tax is its administrative simplicity [,]" n93 which becomes all the more important given the impossibility of monitoring actual vehicle emissions. n94 The United States already levies a low federal tax on gasoline, n95 so Pigovian gasoline taxation would require no additional bureaucracy. In addition, such uniform excise taxes are comprehensive, reaching all drivers, n96 and are difficult for users to avoid. n97 Given the powerful incentives to evade or exploit government energy initiatives, n98 such rigidity and uniformity are virtues. n99 2. Effects on Gasoline Demand The long-term price elasticity of gasoline indicates that increasing fuel taxes will decrease demand for gasoline . While gasoline's short-term price elasticity is notoriously low, long-term elasticity is significantly higher. n100 Indeed, it seems that "even "addicts' consume less in the long run when prices rise." n101 Changes in [*161] consumer's long-term purchasing decisions, such as whether and what type of car to purchase, confirm this. n102 Thus, Pigovian taxes producing high long-term gas prices are likely to encourage efficient consumer behavior. n103 A corollary of the difference in short-and long-term price elasticities is the "Ramsay Rule," which posits that government policies designed to encourage economic efficiency should tax goods and activities with a low price elasticity more highly than those with a high price elasticity. n104 Pigovian gasoline taxation would correct the government's failure to maximize efficiency in this regard. In addition, **Pigovian gasoline taxation would likely produce efficiency benefits greater than the current regime of CAFE fuel-efficiency standards** , even if those standards were abolished. Economists have noted that although effluent charges (taxing a good that pollutes) and effluent standards (capping the amount of pollution each entity can produce) can produce identical results, effluent charges ( **such as Pigovian taxes) do so at a lower cost** . " The nature of the effluent charge is such that it places a greater economic burden on those firms that can avoid polluting at a lower cost thereby saving society the otherwise unnecessary costs associated with a uniform effluent standard." n105 This indicates that higher gasoline taxes would "screen out, systematically, the trips that are worth least to consumers , sparing [] units of gasoline (and trips) that are worth more." n106 Effluent charges, such as federal gasoline taxes, can provide society the same benefits as effluent standards, such as CAFE standards, **but at a significantly lower cost** . Any lawmaker concerned with the nation's economic health should take advantage of this cost-savings when formulating national energy policy. n107 3. Forcing Innovation Pigovian gasoline taxation would reduce demand for gasoline and increase the demand for efficient alternative transportation products - products that are deemed efficient by the market , not by politicians. Current policies assume that higher gasoline prices will not provide incentives adequate to foster the research and development necessary to produce biofuels on a mass scale. n108 However, this approach ignores the competitive market's demonstrated ability to force innovation. n109 [*162] The theory of "induced innovation" posits that " changes in relative factor prices should lead to innovations that reduce the need for the relatively expensive factor." n110 For example, high copper prices during World War II prompted the U.S. government to mint steel pennies in 1943. n111 History provides examples of induced innovation in transportation fuel market as well. "When real petrol prices in the USA increased in the period up to the early 1980s, a significant increase in fuel efficiency of new cars occurred. Later, as real petrol prices decreased significantly ... the increase in fuel efficiency of new cars were brought to a halt." n112 Indeed, in his 2002 article, Induced Innovation and Energy Prices, which compared historical United States patent data against energy price trends to evaluate higher energy prices' ability to force meaningful technological discovery, David Popp concluded, The most significant result is the strong, positive impact energy prices have on new innovations. This finding suggests that environmental taxes and regulations not only reduce pollution by shifting behavior away from polluting activities but also encourage the development of new technologies that make pollution control less costly in the long run . My results also make clear that simply relying on technological change as a panacea for environmental problems is not enough. There must be some mechanism in place that encourages new innovation . n113 Popp also noted that with respect to alternative transportation fuels and vehicles, "the price elasticities found suggest [that] the reaction of the research community to a change in policy, such as a carbon tax, will be swift, and that higher prices would quickly lead to a shift toward environmentally friendly innovation." n114 4. Lessons Learned These possibilities demonstrate the shortcomings of current policies. n115 As opposed to government edicts, "it is the free market that is efficient, spontaneously efficient." n116 Therefore, the systemic nature of the nation's energy crisis indicates that lawmakers' should not be in the business of determining the [*163] best solution, but should leave that to the market. n117 While market principles alone may not provide a universal cure-all to government policy problems, the judicious application of market forces would provide significant gains in this case. n118 B. National Security Benefits Pigovian gas taxation has the potential to dramatically improve the United States' national security. Decreasing demand for gasoline will reduce the vulnerability of the United States to price shocks in international petroleum markets. Less exposure to such volatility would decrease the nation's susceptibility to disruptions in supply caused by forces outside the nation's control, such as weather or geopolitics. One such force, OPEC, would lose influence over the United States as the American thirst for oil subsides. n119 Such stability furthers national security, but there are other benefits as well. 1. Shifting Terms-of-Trade Taxing gasoline would alter the terms of international trade in favor of the United States. n120 Decreasing the domestic demand for gasoline would make alternative domestic sources of transportation comparatively more attractive to American consumers, causing the foreign oil industry to contract and domestic alternative fuel industries to expand. As a result, American industries and products would become more competitive vis-a-vis foreign competitors. n121 In response, OPEC would cut oil prices. This "terms of trade effect" would shift part of the cost of gasoline taxes onto foreign producers of oil n122 and result in more money spent domestically, stimulating economic activity. Therefore, the economically-optimal fuel tax may be greater than one merely intended to compensate for the environmental harm caused by fossil fuel combustion. n123 The national security of the United States would benefit from this trade effect as a result of the negative effects that decreased oil revenue would likely have on exporters of oil. Lower profits reduce an oil exporting regime's ability to exert its will internationally and may weaken its control domestically. This produces a relative benefit for the United States, whose international interests conflict with certain oil exporters, such as Russia, Venezuela, and Iran. With respect to Iran, for [*164] example, lower oil prices may increase pressure for economic reform, "potentially putting pressure on the clerical governing elite to loosen its grip." n124 The United States might capitalize on oil exporters' economic weaknesses by establishing aid and trade relationships in exchange for concessions on military and nuclear policies disadvantageous to the United States. n125 Under pressure to maintain their citizens' standard of living, Middle Eastern regimes would likely liberalize social policies in an effort to diversify their economies. Resulting industries would expand economic opportunities for youth in these countries, thereby reducing the attractiveness of terrorist groups, which depend on widespread discontent and unemployment for recruitment. n126 2. Lower Military Spending Geopolitical changes would, in turn, provide politically-attractive opportunities to reduce the ever-growing military expenditures of the United States. n127 Although "one cannot attribute all expenditures in the Middle East to defending oil supplies[,]" n128 preserving American access to inexpensive oil is of the utmost importance to the United States. Estimate of annual military expenditures toward security oil supplies vary widely but are enormous by any estimate, averaging in the tens of billions of dollars per year when the nation is not at war. n129 However, if the military were not so obligated, the United States could reduce significantly its military presence in other countries or at least deploy its military resources in a more cost-effective manner. This conclusion follows from a basic mathematical insight. Suppose that you maximize a function of several variables subject to a constraint on some of the variables. Then the constraint is removed and the function is maximized again. The maximal value of the function must be higher in the latter case than in the former. n130 [*165] Freed from its addiction to oil, the United States' national security outlook stands to benefit enormously from higher federal gasoline taxes. 3. International Law: A New American Weapon Reducing domestic oil consumption provides an additional national security benefit as well . While "the regulatory approach of environmental law in the United States has generally been reactive rather than truly precautionary," n131 the emissions reductions achieved under Pigovian fuel taxes would enable the U nited S tates to take an active part **in formulating international law on climate change**, yielding the U nited S tates significant gains in several ways . National self-interest powerfully influences international climate change agreements. For example, the Kyoto Protocol's arbitrary, inflexible emissions reduction plan was a production of signatories' "domestic self-interest, rather than sensible policy ." n132 While that plan's drastic carbon dioxide reductions might inconvenience rapidly emerging economies, they would likely have crippled the economy of the United States. n133 However, **the reduced greenhouse gas emissions achieved through Pigovian gasoline taxes would enable the U** nited **S** tates **to participate in international climate change initiatives to its advantage** . If the U nited S tates were to propose multilateral Pigovian taxes on gasoline, it seems likely that world consumption of fossil fuels would decrease , especially considering that many states actively subsidize gasoline at present. n134 This would provide worldwide monetary gains in efficiency. Keeping in mind that the developing world would bear the brunt of climate change's negative effects, and that securing the U nited S tates ' participation is vital to ensuring that meaningful emission reductions are achieved, the U nited S tates could work to structure international agreements in such a way as to gain a disproportionate amount of the efficiency surplus , which could take the form of lump-sum payments. n135 But even in the absence of universal participation and such wealth transfers, projections indicate that the economic gains from Pigovian taxes are largest when also imposed by other countries. n136 Even if imposed unilaterally, though, **Pigovian taxes would likely provide the United States with cost savings in foreign policy** . **As an additional weapon in the nation's arsenal, climate change agreements present an opportunity for the U** nited **S** tates **to impose its will on other countries.** Diplomats might shape climate change[*166]initiatives to the U nited S tates ' advantage **by promoting American-made technologies** , for example. Moreover, such cooperative international engagement is relatively inexpensive in comparison to exercises of military might, thus providing an opportunity to reduce or realign military spending. Not only is the pen mightier than the sword; it is cheaper to use.
 * The U.S. government is creating a “boom and bust” in renewable energy investment that threatens to undermine its lead over China**, the Pew Charitable Trusts said in a report. U.S. investment reached $48.1 billion in 2011 , largely in wind and solar power, the Washington-based research group said last night in a report based on Bloomberg New Energy Finance data. Those funds trumped the $45.5 billion China allocated to renewables , for lead for the U.S. since 2008. The jump to the top of the G-20 ranking followed developers’ efforts to finish projects before incentives expire. With China taking on long-term renewable energy targets and an American tax-break for wind lapsing in 2012, **the U.S. again risks losing its edge** , said Phyllis Cuttino, Pew’s clean energy director. **“China is sending that important policy signal which the U** nited **S** tates **is failing to do to investors,”** Cuttino said in an interview. “Even though China has fallen to number two, it seems as though investment there is going to continue at a very significant level for the foreseeable future. They are going to continue to be a dynamic clean-energy hub for the world.” The U.S. doesn’t have any comparable targets to China’s goals of installing a total of 160 gigawatts of wind power and 50 gigawatts of solar power by 2020, she said. At the same time, a production tax credit benefiting wind producers expires at the end of the year. That’s a threat to the wind industry and has prompted Vestas Wind Systems A/S (VWS), the world’s largest wind turbine maker, to say 1,600 U.S. factory jobs are at risk. Germany, Italy “In the absence of long-term policy, it’s hard to see how the U.S. can grow significantly in the future,” Cuttino said. **“The boom-and-bust cycle of U.S. energy policy sends** ** a very different signal to investors ” from China** . U.S. President Barack Obama took office three years ago pledging to generate jobs in the wind and solar industries. Since then, carbon cap-and-trade legislation has stalled and lawmakers have attacked assistance to renewables after solar manufacturer Solyndra LLC filed for bankruptcy in September. Globally, the installed capacity for renewable power now totals 565 gigawatts, 133 of it in China, 93 in the U.S. and 61 in Germany, according to today’s report. Cuttino said Pew had expected an increased deployment of renewables in 2011, with investment falling, and was surprised spending rose. “This sector is like the little engine that could -- it just keep growing somewhere, somehow,” she said. Germany ranked third for investment in clean energy in 2011, with $30.6 billion, followed by Italy on $28 billion, India on $10.2 billion and the U.K. with $9.4 billion, Pew said. U.K. Rebound The U.K.’s rebound followed a plunge to 13th in 2010 from fifth a year earlier. Investment in 2011 rose to $9.4 billion from $7 billion in 2010, which was revised up from an estimate of $3.3 billion reported a year ago, according to Pew. The latest number remained below the 2009 total of more than $11 billion. More than half of the investments came in solar power, as developers rushed to take advantage of subsidies that the government has now cut. “Many businesses have brought their investments forward before the government’s cuts to support for renewable energy come into force,” Caroline Flint, spokeswoman on energy for the opposition Labour Party, said in an e-mailed statement. “The U.K. must not be allowed to fall behind.” Ministers are “determined” to see continued growth in renewables in the U.K. and plan to pass a law reforming the electricity market that provides long term certainty for investors in low-carbon technologies, the Department for Energy and Climate Change said in an e-mailed statement.

Macalister 10 (Terry, energy editor of the Guardian, “Branson Warns Oil Crunch is coming in the Next Five Years”, 2010, http://www.guardian.co.uk/business/2010/feb/07/branson-warns-peak-oil-close) CM "The next five years will see us face another crunch – the oil crunch . This time, we do have the chance to prepare. The challenge is to use that time well," Branson will say. "Our message to government and businesses is clear: act," he says in a foreword to a new report on the crisis. " Don't let the oil crunch catch us out in the way that the credit crunch did ." Other British executives who will support the warning include Ian Marchant, chief executive of Scottish and Southern Energy group, and Brian Souter, chief executive of transport operator Stagecoach. Their call for urgent government action comes amid a wider debate on the issue and follows allegations by insiders at the International Energy Agency that the organisation had deliberately underplayed the threat of so-called "peak oil" to avoid panic on the stock markets. Ministers have until now refused to take predictions of oil droughts seriously, preferring to side with oil companies such as BP and ExxonMobil and crude producers such as the Saudis, who insist there is nothing to worry about. But there are signs this is about to change, according to Jeremy Leggett, founder of the Solarcentury renewable power company and a member of a peak oil taskforce within the business community. "[We are] in regular contact with government; we have reason to believe their risk thinking on peak oil may be evolving away from BP et al's and we await the results of further consultations with keen interest ." The issue came up at the recent World Economic Forum in Davos where Thierry Desmarest, chief executive of the Total oil company in France, also broke ranks. The world could struggle to produce more than 95m barrels of oil a day in future, he said – 10% above present levels. "The problem of peak oil remains." Chris Skrebowski, an independent oil consultant who prepared parts of the peak oil report for Branson and others, said that only recession is holding back a crisis : " The next major supply constraint, along with spiking oil prices, will not occur until recession-hit demand grows to the point that it removes the current excess oil stocks and the large spare capacity held by Opec . **However, once these are removed, possibly as early as 2012-13 and no later than 2014-15, oil prices are likely to spike**, imperilling economic growth and causing economic dislocation." And, random variables mean an oil shock can come at any time

Abelkop 2k9 (Adam, J.D., University of Iowa College of Law, 2010; B.A., Wake Forest University, PHd Student @ Univ of Indiana, “Why the Government Should Drink Your Milkshake: The Case for Restructuring the Federal Gas Tax,” The Journal of Corporation Law Winter, 2009, 35 Iowa J. Corp. L. 393 pg lexisHH) The United States burns more oil than any other nation and imports roughly 60% of the oil it consumes. n30 The Energy Information Administration (EIA) estimates that domestic consumption of petroleum will average 19.7 million barrels per day (bbl/d) in 2009. n31 Given America's mammoth level of consumption - popularly referenced as its "addiction to oil" n32 - and dependence on foreign sources of petroleum, the United States is particularly vulnerable to an oil supply shock. n33 An oil supply shock occurs when a perceived or actual decline in the supply of crude causes a rapid increase in the market price and subsequent harm to the economy as a whole. n34 Such a shock could come unexpectedly and arise under a variety of circumstances. n35 There is a high risk that violent conflict or political instability will disrupt oil supplies in the near future. n36 An attack on a pipeline or refinery in Nigeria, Iraq, or Saudi Arabia or a possible conflict between the United States and Iran could severely disrupt the flow of oil to the marketplace. n37 Even though Canada and Mexico are among the [*399] United States' primary sources of oil, n38 the United States would not be shielded from the effects of a supply disruption of this nature because the "price of oil is determined in the world market and depends mainly on the balance between world demand and supply ." n39 This is reason for concern given that 85% of the world's proven reserves are in nations to which the Government Accountability Office assigns medium-to-high investment risk. n40 Of course, the severity of supply shocks will vary in degree. An attack on a pipeline, for example, would not be as significant as an obstruction to shipping traffic through the Strait of Hormuz, which would threaten the flow of 55% of the world's oil reserves. n41 Oil is a fungible commodity, and the ability of the international economy to absorb limited supply shocks has increased since the 1973 oil embargo. n42 The gravity of a supply shock is dependent on how suddenly it occurs, whether it will obstruct the flow of oil in the long-term, and the overall state of the economy: It is not clear how the economy would react to a sudden as opposed to a gradual increase in the price of oil or how it would overcome a long-term reduction in the oil supply. A jump in the cost of oil would strike at the margin of an economy that is facing substantially elevated oil cost already. n43 Extreme weather events, for example, are isolated; but even small losses of supply have regional consequences. The series of hurricanes that struck the Gulf of Mexico in the fall of 2008 significantly upset the southeastern oil distribution system, causing gasoline shortages throughout that region. n44 This relatively small shock, however, did not greatly affect the price of oil or alter long-term investment decisions in the energy market in the way that the onset of a fresh conflict in the Middle East could. n45 Structural problems throughout the petroleum sector also have the potential to instigate an economic crisis. n46 Eighty percent of the world's oil infrastructure is "corroded - literally rusting through ... ." n47 Some economists forecast that inadequate investment in production and refining infrastructure will cause a severe oil supply crunch within the next decade. n48 In other words, as demand for oil steadily increases, [*400] deteriorating infrastructure may impede the ability of oil producers to refine "below-ground oil resources ... into producing capacity. " n49 A more notable limit on oil production capacity is that oil is a finite resource; one day in the not-too-distant future, oil production will reach its peak and then steadily decrease over time. n50 Many scholars have attempted to predict when world oil production will peak, and forecasts vary wildly. n51 A loose consensus of analysts, though, projects that worldwide conventional crude oil production n52 could peak before 2012. n53 The accepted rate of global oil depletion is 2.5% annually. n54 The production capacity of nearly all of the largest oil fields is already in decline, n55 and of the top twenty oil producing nations, which together account for 85% of all oil production, ten are already in decline. n56 The discovery of new oil fields is "just barely able to compensate for the decline [in production] from larger fields; [new discoveries] will not allow us to increase overall production any further." n57 After world oil production reaches its peak, it will decline at an exponential rate. n58 The effect will be a supply shock more severe than any [*401] the world has previously experienced. n59 The shock will significantly impair oil-reliant industries such as the transportation and agriculture sectors, n60 cause conflicts over energy resources, n61 and wreck the already-strained global economy. n62 That’s the biggest internal link to conflict and regional instability

Arizona State Law Journal 09 (41 Ariz. St. L.J. 315, “Choosing the Nuclear Option: The Case for a Strong Regulatory Response to Encourage Nuclear Energy Development, #315, Lexis//HH)// Additionally, the oil economy threatens American and global security in several ways. First, oil-exporting countries use their trade positions to constrain American foreign policy objectives. n40 The United States must carefully frame its foreign policy such that it does not upset oil markets. n41 As long as the United States relies so heavily on oil, it must pay credence to those who control the oil supply, effectively giving both friendly and hostile nations a critical bargaining chip. n42 Second, oil dependency may create **conflict between oil purchasers**, who must compete for the planet's **limited supply**; namely, oil could strain relations between the U nited S tates and the emerging economies of China and India, all of whom must power growing [*324] industrialized societies. n43 In other words, as fossil fuel demand continues to outpace supply, this limited-resource economy inevitably creates conflict, whether military or otherwise. n44 Third, oil dependency forces the U nited S tates to mortgage its energy future on volatile regions of the world, such as the Middle East, South Asia, and South America. n45 Such reliance allows regional instability to threaten U nited S tates oil supply and may even force the U nited S tates into conflict simply to protect its oil assets. Furthermore, although the average American likely sees rising gasoline prices as a harbinger of economic problems caused by oil's limited supply, the actual economic impact of declining oil supply will extend far beyond the gas pumps. Dangerously, this economic collapse will come sooner, rather than later, as peak oil approaches in the coming decades. n46 Even the last remaining oil is largely unavailable, because cost, technological, and political barriers prevent its use; remaining oil in other words, is only "theoretical." n47 Peak oil is the point at which global oil output reaches its maximum, the point at which the rate of production enters a terminal decline. n48 At this point, oil prices rise at an exponential and unstoppable rate because global supply cannot meet demand. n49 Peak oil would have an economic ripple effect "that would make 1929 look like a dress rehearsal and could touch off a deperate and probably violent contest for whatever oil supplies remained ." n50 The rising price of oil is already impacting the economy in nearly all sectors - transportation, electricity, manufacturing. n51 Anticipated higher prices would force businesses either to endure the costs or to pass the costs on to consumers. n52 In either event, the wide-ranging economic effect would be devastating beyond recovery. Until this economic crash occurs, oil will continue to destroy the environment by depositing dangerous emissions into the atmosphere. As with coal, oil contributes strongly to pollution and global warming, risking extreme environmental damage to the planet and endangering populations' well-being. n53 Whether oil's legacy is systemic environmental and health [*325] damage or an eventual economic or planetary collapse, oil is ultimately unsustainable. Extinction

Lendmen 07 (Stephen, “Resource Wars - Can We Survive Them?”, 6-6-7, http://www.rense.com/general76/resrouce.htmHH) Near the end of WW II, Franklin Roosevelt met with Saudi King ibn Saud on the USS Quincy. It began a six decade relationship guaranteeing US access to what his State Department called a "stupendous source of strategic power, and one of the greatest material prizes in world history" - the region's oil and huge amount of it in Saudi Arabia. Today, the Middle East has two-thirds of the world's proved oil reserves (around 675 billion barrels) and the Caspian basin an estimated 270 billion barrels more plus one-eighth of the world's natural gas reserves. It explains a lot about why we're at war with Iraq and Afghanistan and plan maintaining control over both countries. We want a permanent military presence in them aimed at controlling both regions' proved energy reserves with puppet regimes, masquerading as democracies, beholden to Washington as client states. They're in place to observe what their ousted predecessors ignored: the rules of imperial management, especially Rule One - we're boss and what we say goes. The Bush administration is "boss" writ large. It intends ruling the world by force, saying so in its National Security Strategy (NSS) in 2002, then updated in even stronger terms in 2006. It plainly states our newly claimed sovereign right allowed no other country - the right to wage preventive wars against perceived threats or any nations daring to challenge our status as lord and master of the universe. Key to the strategy is controlling the world's energy reserves starting with the Middle East and Central Asia's vast amount outside Russia and China with enough military strength to control their own, at least for now. These resources give us veto power over which nations will or won't get them and assures Big Oil gets the lion's share of the profits. In Iraq, the new "Hydrocarbon Law," if it passes the puppet parliament, is a shameless scheme to rape and plunder the country's oil treasure. It's a blueprint for privatization giving foreign investors (meaning US and UK mainly) a bonanza of resources, leaving Iraqis a sliver for themselves. Its complex provisions give the Iraqi National Oil Company exclusive control of just 17 of the country's 80 known oil fields with all yet-to-be-discovered deposits set aside for foreign investors. It's even worse with Big Oil free to expropriate all earnings with no obligation to invest anything in Iraq's economy, partner with Iraqi companies, hire local workers, respect union rights, or share new technologies. Foreign investors would be granted long-term contracts up to 35 years, dispossessing Iraq of its own resources in a scheme to steal them. That's what launched our road to war in 1991 having nothing to do with Saddam threatening anyone. It hasn't stopped since. The Bush (preventive war) Doctrine spelled out our intentions in June, 2002. It then became NSS policy in September getting us directly embroiled in the Middle East and Central Asia and indirectly with proxy forces in countries like Somalia so other oil-rich African nations (like Sudan) get the message either accede to our will or you're next in the target queue. With the world's energy supplies finite, the US heavily dependent on imports, and "peak oil" near or approaching, "security" for America means assuring a sustainable supply of what we can't do without. It includes waging wars to get it, protect it, and defend the maritime trade routes over which it travels. That means energy's partnered with predatory New World Order globalization, militarism, wars, ecological recklessness, and now an extremist US administration willing to risk Armageddon for world dominance. Central to its plan is first controlling essential resources everywhere, at any cost, starting with oil and where most of it is located in the Middle East and Central Asia. The New "Great Game" and Perils From It The new "Great Game's" begun, but this time the stakes are greater than ever as explained above. The old one lasted nearly 100 years pitting the British empire against Tsarist Russia when the issue wasn't oil. This time, it's the US with help from Israel, Britain, the West, and satellite states like Japan, South Korea and Taiwan challenging Russia and China with today's weapons and technology on both sides making earlier ones look like toys. At stake is more than oil. **It's planet earth with survival of all life** on it issue number one twice over. Resources and wars for them means militarism is increasing, peace declining, **and the planet's ability to sustain life** front and center, if anyone's paying attention. They'd better be because beyond the point of no return, there's no second chance the way Einstein explained after the atom was split. His famous quote on future wars was : "I know not with what weapons World War III will be fought, but World War IV will be fought with sticks and stones." Under a worst case scenario, it's more dire than that. There may be nothing left but resilient beetles and bacteria in the wake of a nuclear holocaust meaning even a new stone age is way in the future, if at all. The threat is real and once nearly happened during the Cuban Missile Crisis in October, 1962. We later learned a miracle saved us at the 40th anniversary October, 2002 summit meeting in Havana attended by the US and Russia along with host country Cuba. For the first time, we were told how close we came to nuclear Armageddon. Devastation was avoided only because Soviet submarine captain Vasily Arkhipov countermanded his order to fire nuclear-tipped torpedos when Russian submarines were attacked by US destroyers near Kennedy's "quarantine" line. Had he done it, only our imagination can speculate what might have followed and whether planet earth, or at least a big part of it, would have survived. And, escalation will be quick – resulting in complete planetary annihilation

Bearden, 6/12/2000 (Thomas – Association of Distinguished American Scientists and LTC, U.S. Army (Retired), Why The Energy Crisis Needlessly Exists and How to Solve It, p. [|www.cheniere.org/techpapers/Unnecessary%20Energy%20Crisis.doc]) History bears out that **desperate nations take desperate actions**. Prior to the final economic collapse, the stress on nations will have increased the intensity and number of their conflicts, to the point where the arsenals of weapons of mass destruction ( WMD ) now possessed by some 25 nations, are almost certain to be released. As an example, suppose a starving North Korea [7] launches nuclear weapons upon Japan and South Korea, including U.S. forces there, in a spasmodic suicidal response. Or suppose a desperate China--whose long-range nuclear missiles (some) can reach the United States--attacks Taiwan. In addition to immediate responses, the mutual treaties involved in such scenarios will quickly draw other nations into the conflict, escalating it significantly. Strategic nuclear studies have shown for decades that, under such extreme stress conditions, once a few nukes are launched, adversaries and potential adversaries are then **compelled to launch on perception** of preparations by one's adversary. The real legacy of the MAD concept is this side of the MAD coin that is almost never discussed. Without effective defense, the only chance a nation has to survive at all is to launch immediate full-bore pre-emptive strikes and try to take out its perceived foes as rapidly and massively as possible. As the studies showed, **rapid escalation to full WMD exchange occurs**. Today, a great percent of the WMD arsenals that will be unleashed, are already on site within the United States itself [8]. The resulting great Armageddon will **destroy civilization** as we know it, and perhaps most of the biosphere, at least for many decades. My personal estimate is that, beginning about 2007, on our present energy course we will have reached an 80% probability of this "final destruction of civilization itself" scenario occurring at any time, with the probability slowly increasing as time passes. One may argue about the timing, slide the dates a year or two, etc., but the basic premise and general time frame holds. We face not only a world economic crisis, but also a world destruction crisis. So unless we dramatically and quickly solve the energy crisis — rapidly replacing a substantial part of the "electrical power derived from oil" by "electrical power freely derived from the vacuum" — we are going to incur the final "Great Armageddon" the nations of the world have been fearing for so long. I personally regard this as the greatest strategic threat of all times — to the United States, the Western World, all the rest of the nations of the world, and civilization itself { } { }. What Is Required to Solve the Problem To avoid the impending collapse of the world economy and/or the destruction of civilization and the biosphere, we must quickly replace much of the "electrical energy from oil " heart of the crisis at great speed, and simultaneously replace a significant part of the "transportation using oil products" factor also.