Robert Naiman wrote:
>
> i saw an item recently about how consumers were finally shifting their
> behavior in response to the increase in gas prices - changing the cars they
> buy, getting rid of cars, switching to public transportation.
>
> it made me reflect on the thought that from a orthodox economist's point of
> view, there's no environmental policy that can match correct prices. yammer
> about conservation til you're blue in the face. move prices enough, and keep
> them there, and if people believe that the change is permanent, they will
> move.
>
> part of the story about lack of investment in alternatives to oil has been
> that the price of oil was so low, that the alternatives weren't profitable.
> and even when the price of oil reached the theoretical tipping point,
> investors were still skittish, because these are long-term investments, and
> if the price of oil falls again you're going to take a bath.
>
> so what if the government could guarantee these investors that the price of
> oil in the united states will never fall below a certain level?
>
> suppose the government were to announce today: from now until forever, a
> gallon of gas will never sell in the united states for less than two
> dollars, and a barrel of oil will never sell for less than fifty dollars, in
> 2008 dollars. if the market price falls below that, we will push it up
> through taxation and stockpiling.
>
> it wouldn't do anything to help consumers today. but it wouldn't hurt them
> either. now people are groaning about $4. if it were $2 they'd have a big
> party.
>
> but it would assure investors that any investment that's profitable at $50 a
> barrel will always be profitable.
>
> folks have adjusted to the idea that gas is more than $2 a gallon. why not
> put that change in behavior in the bank for all time?
>
>
>
>
>
>
> _______________________________________________
> pen-l mailing list
> pen-l at lists.csuchico.edu
> https://lists.csuchico.edu/mailman/listinfo/pen-l
>
>
-- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante.