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Thanks for your thoughts. If I'm understanding correctly your argument basically comes down to arguing there is a high elasticity of supply and a low elasticity

by zacmps 4y ago

Thanks for your thoughts. If I'm understanding correctly your argument basically comes down to arguing there is a high elasticity of supply and a low elasticity of demand. I guess I'll look into the estimates and see. One thing I would say is that reductions in supply in one jurisdiction will compound with restrictions in other jurisdictions. For example NZ banned new oil and gas exploration a while ago but some parties want to repeal it with the same argument as yours, someone else will sell it. But if it happens in NZ, then the US, then ... I think you reach a point where there is a non-trivial challenge to increasing supply. Then these measures will have stronger effects at increasing prices and hence reducing consumption.

_8j50 4y ago
Reducing supply without reducing it enough does more harm than good and reducing it enough without political backfiring is not possible. On the demand side, people mostly live viable alternatives like Tesla cars for example so that is where rhe focus should be. Cars aside, airlines are not going to convert their fleet to a yet non-existent electric commercial planes because of low supply, matter of fact, if all of US stopped extracting and refining oil, they will use it as an excuse to hike prices but in reality that will may not change prices because at the end of the day it costs what people are willing to pay for it, there will not be a global oil shortage, just a temporary logistics nightmare. On the other hand, cruise ships are by far the most notirious class of polluters. So perhaps targeted taxation of oil is what you need. If I can compare it to something it would be trying to get a heroin addict (or even serious alcoholic) to stop using. If you succeed in cutting off all supply right away, they die. If you cut off supply locally, they will get it somewhere else where you can't help them get rehabilitated. Half measures are almost always worse than not doing anything.

by zacmps 4y ago

_8j50 4y ago

Reducing supply without reducing it enough does more harm than good and reducing it enough without political backfiring is not possible. On the demand side, people mostly live viable alternatives like Tesla cars for example so that is where rhe focus should be. Cars aside, airlines are not going to convert their fleet to a yet non-existent electric commercial planes because of low supply, matter of fact, if all of US stopped extracting and refining oil, they will use it as an excuse to hike prices but in reality that will may not change prices because at the end of the day it costs what people are willing to pay for it, there will not be a global oil shortage, just a temporary logistics nightmare. On the other hand, cruise ships are by far the most notirious class of polluters. So perhaps targeted taxation of oil is what you need. If I can compare it to something it would be trying to get a heroin addict (or even serious alcoholic) to stop using. If you succeed in cutting off all supply right away, they die. If you cut off supply locally, they will get it somewhere else where you can't help them get rehabilitated. Half measures are almost always worse than not doing anything.