Want to see the back of fossil fuels? Calm down, hippies. CAPITALISM has an answer

Make it cheaper and they will BUY

Hippies stage sitdown on beach (in shape of peace sign)

Worstall on Wednesday It's a distinctly lonely intellectual position to have — agreeing with the IPCC that climate change is a problem, one we're causing, and something that we might want to do something about but thinking that we've probably already done what we needed to do.

The extent of the Arctic ice cap during the last ice age

I'm no expert on energy... but I do know my way around an economics paper

Lonely as it may be, that's where I am. And I am here simply because I've bothered to go and read a lot of the stuff on the subject.

I have to look up the difference between a Watt and a Joule, so there's no point in asking me to look at energy budgets and the like. I'm entirely happy to accept what the IPCC says. Even if it's lying about everything, it's still going to be the basis for public policy. And as such, it's worth thinking about what the best policies would be.

However, I do know my way through an economic report, and have read the ones upon which the IPCC's work is based (namely the Stern Review). I also know why Bill Nordhaus thinks Stern is a Silly Boy and why Richard Tol (who has been part of those IPCC reports) is positively sulphurous on the subject of Stern.

The outcome of knowing all of this is that moving away from fossil fuels gets rid of the problem. No, we don't have to stop economic growth; no, we don't have to give in to the Forward to the Middle Ages fantasists at Greenpeace; and no, it's not a fundamental reconstruction of capitalism, or globalisation, that's required (indeed, those IPCC models show that globalisation itself reduces climate change and capitalism is entirely consistent with beating it).

It really is just that move away from fossil fuels to some other (less polluting) form of energy production that is all that is necessary. Furthermore, the best (and most efficient) way of encouraging this is a carbon tax, as we lose less of everything else by doing it this way.

Now that I've solved the problem in one paragraph we can get off to the pub. Nope. Simply defining the problem doesn't help implement the solution. What we want is some form of energy generation, capture and/or storage that allows us to continue along on our merry way without using those pesky, dirty fossil fuels.

And there's a rather large industry devoted to discovering exactly that. While various people claim some sort of success, no one is (as yet) claiming that they've managed it in the one way that an economist would agree is actually the solution.

That "one way" should be cheaper than fossil fuels. You'll have seen claims being made recently (from Stern again, among others) that beating climate change will actually incur NO NET costs. But that's true in only one specific scenario: by adding the benefits of poor people not choking to death on coal smoke as more expensive solar cells are used.


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