Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
Some other thoughts:

The price-inelasticity of driving doesn't mean we can't do anything about it. Reducing driving requires different measures, like building a better public transportation infrastructure, improving land use planning and working on more livable cities (reducing traffic in cities is a big part of that, in turn). These can be paid for with a fuel tax. Or with any other tax.

Cars continue to be subsidised because the external costs of driving are not paid for. They are difficult to quantify. But they can be quite large, especially for the more polluting old diesels.

There was a recent report in Germany that rising driving costs and rising oil prices were 2 of the top 3 concerns Germans have for the next year. No politician is going to introduce further fuel taxes in this context.

If we're quite not at peak oil yet and oil prices go down again in the next few years, a drive for further fuel tax increases might become viable again.

Introducing fuel taxes on the EU level will remain impossible because all matters of environmental taxation have to be decided unanimously, also under Lisbon (though they inserted a passerelle clause, so there is a slight chance that this will change in the future).

by nanne (zwaerdenmaecker@gmail.com) on Sat Dec 22nd, 2007 at 06:53:05 PM EST
I think a key issue you highlight is the relationship between regulations and technology.

From Brad Plumer comes a graph of patent filings for sulfur dioxide-control technologies for electric power plants.

So it is with car design and manufacture. It is possible to get this kind of jump using fuel taxes, but the level of fuel taxes required is very high and certainly more economically (not to mention politically) damaging than just making a regulatory limit on new Car CO2 emissions.

by Metatone (metatone [a|t] gmail (dot) com) on Sun Dec 23rd, 2007 at 12:01:26 PM EST
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That's a pretty amazing graph. Thanks.
by nanne (zwaerdenmaecker@gmail.com) on Mon Dec 24th, 2007 at 05:00:41 AM EST
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