The Environmental Economics blog has a few of posts about CAFE, including a link to this study done by Resources for the Future that purports to estimate an "optimal" gasoline tax of about $1 per gallon. It is based on factors such as air pollution, greenhouse gas emissions, congestion, and accidents. The author is up-front about the uncertainties involved with making such a calculation.
This calculation does not include the "externality" of the impact that our importation of oil from authoritarian regimes has on the welfare of people living in those countries and or the terrorism those regimes may sponsor, the topic that originally sparked this thread. Overall, though, a thoughtful read and an excellent blog. Also of interest is Matthew Kahn's new blog, focusing on Environmental and Urban Economics.
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