Editors' Summary

Policymakers should work to place a floor under the price of crude oil and derivates by imposing a variable import tax on those products. A variable import tax would give consumers and the alternative energy industries a clear price signal in order to improve their decisionmaking, as well as to provide a steady price signal to domestic energy producers. The tax would also prevent price collapses. Although economists have debated flat oil import fees vigorously, this proposal has been overlooked to date.