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The price of oil+nat gas will fall as alternative forms of energy come online. But when the price falls, consumption goes up (demand elasticity).
by anonuser123456 3y ago
The price of oil+nat gas will fall as alternative forms of energy come online. But when the price falls, consumption goes up (demand elasticity).
- alexb_ 3y agoIf the logic works in this direction, it works in the other direction too - are you saying we should shut down renewable energy so that the price of energy goes up and consumption of it goes down accordingly?
- anonuser123456 3y ago>are you saying we should shut down renewable energy so that the price of energy goes up and consumption of it goes down accordingly? No. I’m suggesting that once a cost competitive alternative exists at scale for hydrocarbons, we institute Pigouvian taxes (e.g. carbon taxes). This ensures that at the margin, people are incentivized to choose low/zero carbon energy sources.
- sebzim4500 3y agoThere is a nonzero cost of extracting hydrocarbons, the price can only fall so far.