On Wed, Feb 11, 2009 at 3:11 PM, Jim Devine <[email protected]> wrote: > 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.
We can agree that we don't live in a world in which all else is constant. But IF we did then we've already precluded the case where clean energy costs more than dirty energy. Actually, even in the real world, it's not a given that dirty energy is necessarily cheaper. > 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. Your difficulty in seeing my point arises from your inability to "not think like an economist". Things are either endogenous or exogenous and if they are endogenous then one thing follows from another nature-like as effect from cause. But, Jim, if growth is a political imperative (which you appear to accept) then government policy will intervene to compensate for the impact of an energy cost increase on consumption (that is to say, in some hypothetical non-all-else-is- constant world in which clean energy costs more than dirty). I guess you could call that an exogenous response to an endogenous effect. Or something. The think is, I'm not talking about "market behaviors in the absence of government intervention" or some such twaddle. Intervention is the FOUNDATION upon which the market operates. -- Sandwichman _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
