Sandwichman wrote: > ... my comment about using more clean energy was not a typo. Increases > in scale can easily overwhelm increases in efficiency. If you are > ASSUMING that clean energy will cost so much that it will lead to an > ABSOLUTE decline in energy use, then it's your assumption that YOU > have to explain, not something implicit in my argument that I would > have to defend. ...
As I said before, all else constant (e.g., if incomes stay the same), a rising unit price of (say) coal would cause an _absolute_ fall in the quantity of coal demanded. I don't know of why this market -- or the market for any other kind of energy source -- could work any other way. But this all else equal argument does not apply (as I said before) if all else is _not_ equal. Specifically, incomes can increase. As far as I know, that's what causes the "increases in scale" to which Tom refers. It's unclear to me why there would be increases in scale for other reasons. The rise in income could come from exogenous sources (i.e., not due to the imposition of a carbon tax) -- the normal rise in GDP, incomes, and spending over the years, absent a depression. If so, this would counteract the impact of carbon tax, as I said before. Then, the imposition of the tax causes only a _relative_ fall in the quantity of coal and other carbon-based energy sources. What Tom seems to be saying (and I must admit I don't get it completely) is that an imposition of a carbon tax causes an endogenous increase in income and/or scale. Maybe Tom is right, but I haven't seen his explanation yet. I can imagine, however, is that the imposition of a carbon tax might cause those folks who run our economy (the capitalists) to freak out and stop investing in new plant and equipment. (They're notoriously flaky.) This would cause a fall of income, spending, and GDP (a recession) and a rise in involuntary free time (unemployment). This would reduce the quantity of carbon-based energy demanded. > Why is relentless GDP growth a "completely different matter"? That's > exactly what Gene and I were talking about. Tom had written: >> Yes, we can produce cleaner energy... and the cleaner we can make it the more we'll use. Yes, we can increase energy efficiency... << I interpreted this as saying that the introduction of cleaner energy _causes_ the greater use of energy (an _increase_ in the quantity demanded) and I assumed that all else constant, cleaner energy would be more expensive in the market than dirty energy. (Think of the cost of carbon sequestration and other efforts to internalize external costs!) Now, if Tom was _not_ asserting a causal connection between cleaner energy and greater use of energy but was instead saying that instead it is the "relentless growth" (of GDP, I presume) that is causing greater use of energy (and thus counteracting the effect of more expensive energy), then we agree. That is what I meant by saying "That's a completely different matter." If it's relentless GDP growth that's to blame, then we agree. -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
