Hyundai is the New Porsche
Many who favor heavy-handed government approaches to reducing greenhouse gas emissions argue that such efforts are needed because people won't adjust on their own. One recent example of this argument is that we need to have extremely high oil prices or gas taxes to reduce CO2 emissions.
At a recent forum at Town Hall, an energy economist who advocates efforts to reduce carbon emissions was shocked when more than one person in the audience called for $400 per barrel oil. In response to my recent piece about carbon prices, one comment on the Sightline blog entry about the proposal asked "what if the carbon price needs to be $300 or $500 a tonne or more as some economists say?"
First, no economists say $300 or $500 a ton. The gurus of climate doom, Al Gore and Nicholas Stern call for $100 a ton. Most economists call for something much lower than that.
Second, as with so many debates, while government decides what to do, market forces are already at work. A recent report finds that the price of small cars and trucks are climbing because demand for fuel efficient vehicles is increasing. The US News article notes that "Last year U.S. consumers bought a record 2.8 million of them [small cars], and with sales up 4 percent in the first quarter this year, the record almost surely will be shattered." This is more permanent than changes in driving behavior. It is an every-day improvement in fuel efficiency for years to come.
These numbers are more evidence that while some believe only the government can steer us toward energy efficiency, millions of individuals working through the market respond more quickly and effectively.
