Re:Global oil use heads for steepest annual contraction
by jariel on Tuesday March 17, 2020 @06:20AM
(#22603478)
" is that large policy changes have social costs "
The 'large policy changes' will have completely varying consequences across the economic spectrum, for good and bad, which is the general problem with centralized planning.
So if the government 'shut down all co2 emitting factories' it might have small consequences here, and terrible consequences over there.
But if the government institutes a 'carbon tax' that makes your 'pet toys' and 'medicine' 10% more expensive, then given the inelasticity in demand and surpluses derived from medicine, people will continue to buy it at the same rate, and possibly buy fewer 'pet toys'. If travel rose by 20%, then maybe we'd see less leisure, fewer business trips, but the 'important trips' would still happen.
The 'large policy changes' will have completely varying consequences across the economic spectrum, for good and bad, which is the general problem with centralized planning.
So if the government 'shut down all co2 emitting factories' it might have small consequences here, and terrible consequences over there.
But if the government institutes a 'carbon tax' that makes your 'pet toys' and 'medicine' 10% more expensive, then given the inelasticity in demand and surpluses derived from medicine, people will continue to buy it at the same rate, and possibly buy fewer 'pet toys'. If travel rose by 20%, then maybe we'd see less leisure, fewer business trips, but the 'important trips' would still happen.