CLIMATE CRISIS CLIMAX : MASTER ESSAY ECONOMICS

Across the globe, politicians are fuming about record-high gas prices and proposing a range of policy mechanisms to bring down costs, including cutting gas taxes and offering drivers rebates.

These policies make political sense as everyday people suffer at the pump, but they help mask the true cost a gallon of gas imposes on society - from the risk of traffic accidents to the contribution to climate change.

Calculating the damage is a fraught process, and economists don't necessarily agree about all the variables. But one thing is definitely true : ''driving costs society much more than you're paying to do it.''

These unpaid costs to society - what economists call externalities - are fairly easy to understand. Cars cause gridlock, which reduces productivity. Accidents kill tens of thousands in the U.S. each year. Cars generate air pollution and, as a result, contribute to health ailments like asthma and heart disease.

Importantly, cars also emit carbon dioxide and contribute to global climate change. The average U.S. passenger vehicle emits 4.6 metric ton of carbon dioxide annually, and transportation is responsible for nearly 30% of the country's greenhouse-gas emissions.

To find a precise climate of the externalities associated with driving, I turned to a 2007 paper from Resources for the Future.

The research group found that if you add up all the mileage-related externalities - namely congestion, accidents, and local air pollution - the cost comes to a whooping $2.10 per gallon. Climate change contributes to another 72c per gallon if you look at the group's estimates that are in line with current understanding of the effects of emissions.

Add the two up and it's clear the cost of the externalities can total $3 per gallon.

Of course, no politician is proposing a gas tax to account for all the damage driving causes. On average, state taxes add 31c to the cost of the gallon of gas while federal taxes add another 18.4c according to federal data.

Nonetheless, the numbers offer an important dose of reality : without a radical policy change, drivers are getting a free ride.

The World Students Society thanks author Justin Worland.