an article by Thomas Covert and Michael Greenstone (University of Chicago, Illinois, USA) and Christopher R. Knittel (Massachusetts Institute of Technology, Cambridge, Massachusetts, USA published in Journal of Economic Perspectives Volume 30 Number 1 (Winter 2016)
Abstract
Scientists believe significant climate change is unavoidable without a drastic reduction in the emissions of greenhouse gases from the combustion of fossil fuels.
However, few countries have implemented comprehensive policies that price this externality or devote serious resources to developing low-carbon energy sources. In many respects, the world is betting that we will greatly reduce the use of fossil fuels because we will run out of inexpensive fossil fuels (there will be decreases in supply) and/or technological advances will lead to the discovery of less-expensive low-carbon technologies (there will be decreases in demand).
The historical record indicates that the supply of fossil fuels has consistently increased over time and that their relative price advantage over low-carbon energy sources has not declined substantially over time.
Without robust efforts to correct the market failures around greenhouse gases, relying on supply and/or demand forces to limit greenhouse gas emissions is relying heavily on hope.
JEL Classification: Q35, Q42, Q53, Q58, Q48
Full text (PDF)
Hazel’s comment:
This article was, of course, written some considerable time before the change of policy in the USA about climate change.
Experts are now to be ignored.
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