An excellent discussion by Daniel Gros, an economist for the EU, brings home a very-discouraging-but- impossible-to-avoid fact about energy consumption. As the price of oil rises, one might suspect that driving and consumption will decline, but in fact the high price of oil vs. the falling price of coal means that we as a species will be using more coal relative to oil, with disastrous consequences for the climate. To wit:
It is often thought that high oil prices could contribute to
lowering CO2 emissions because they make energy more expensive, thus
encouraging lower energy consumption. But this view overlooks that a
high price of oil relative to coal encourages the substitution of a
hydrocarbon with pure carbon, thus increasing the carbon intensity of
energy use. The supply of coal is abundant, especially in the new
emerging energy giants China and India, and relatively elastic. This
implies that the price of coal is likely to stay low, thus encouraging
an increase in the carbon intensity of energy use everywhere. Reaching
the goal of reducing CO2 emissions will thus be even more difficult
than generally assumed if oil (and thus also gas) prices remain at
present levels.
The latest World Energy Outlook from the International Energy Agency
already forecasts on a business-as-usual scenario an increase in the
share of coal in global energy use. But over the last five years
business has not been as usual as one half of the increase in global
energy consumption has come from coal, prompting acceleration of global
CO2 emissions. Sustained high hydrocarbon prices will intensify this
trend, making it highly unlikely that the goal to reduce CO2 emissions
can be reached.
We need a tax on carbon. Heck, the price of pure carbon for burning is falling! It’s a recipe for disaster:
Kit Stolz 
>>> We need a tax on carbon.
That’s what you said about petroleum products. Now look what you did.
We’re putting in a coal stove in anticipation of winter prices. Thanks to the eco-nuts, we’ll all be burning more coal than ever soon. Well done!
But the caribou in ANWAR won’t be bothered, at least.
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Yes, a tax on carbon — including coal stoves — would help enormously to rationalize the energy/global warming issue, as the many economists of all varieties in the Pigou Club agree:
http://gregmankiw.blogspot.com/2006/09/rogoff-joins-pigou-club.html
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What a bunch of morons….calling for new government taxes….yeah…let’s grow the government bigger and big daddy gov’t will protect us under its benevolent wings. Idiots!
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This is what they are talking about when they promote electric cars… cars that run on coal for God’s sake people wake up
– this country is powerful for a reason – we make the world a better place and restricting our oil intake is just silly – the USA will lead everyone into green energy faster if we are not crushed by the gloom and doom crowd first. Get off our backs and let us lead!
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