Guilt-Free Gas Guzzling

Cars probably pay their own way, and then some.


Even environmentalists should learn to stop worrying and love their cars, says a new study from the Reason Foundation.

Numerous studies, by sources ranging from the U.S. Department of Transportation to the World Resources Institute, claim that the price tag on the window of that car you've got your eye on doesn't tell you the half of it. Those studies accuse cars of driving off and leaving the rest of us holding the bill for anywhere from $60 billion to $700 billion every year. Those numbers represent what economists call "externalities"–costs from a transaction that get laid on people not part of the deal. But Kenneth Green of the Reason Foundation, in his study Defending Automobility, says those numbers are full of holes big enough to drive a pick-up through.

Car use definitely does impose some unpaid-for externalities, Green grants, such as the health effects of auto pollution. But those real externalities only add up to about $8 billion a year, which is more than covered by various taxes and fees directly paid by, and only by, car drivers, which add up to at least $22 billion a year.

Most of cars' supposed external costs are more fanciful, Green finds. These include cost estimates for global warming, wetland loss, land-use impact, the value of land "wasted" as roads or parking, and military costs of keeping a steady flow of foreign oil. These cost calculations are often inherently uncertain and incalculable, as for global warming or land use. Some estimates ascribe all costs to autos even though cars' contributions to such costs as wetland loss or defending the Middle East are debatable.

Another big flaw in auto-cost studies is refusing to acknowledge unpaid for–though hard to quantify--benefits that cars give us, from private freedom of movement to property values jumping because of the easier access cars provide.

The calculations also ignore that since at least 87 percent of Americans are car users, most any cost imposed on society at large hits car users themselves. "When you look at auto cost estimates, you find uncritical exaggerations of cost and disingenuous omissions of benefits," Green says. "The fact is, most people own cars or benefit from them. There is no large pool of victims paying money for cars and receiving no benefit."