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Wednesday, August 24, 2005

Energy Plan

Don Boudreaux:
"I sent to the Boston Globe this letter in response:

To the Editor:

John Heywood reports that, to reduce Americans’ use of petroleum, he and his MIT colleagues have 'developed an integrated set of fiscal and regulatory policies' (Letters, Aug. 20).

His policies are unnecessary. An integrated worldwide network of appropriate incentives and knowledge loops already is in place and working precisely as it should: it’s called the price system. Higher oil prices promote producer efforts to find economically viable substitutes while encouraging consumers to use less oil. And compared to Dr. Heywood’s top-down scheme, market pricing does not depend upon a few geniuses in authority getting millions of important details just right."
Right on!

Donald J. Boudreaux said that they created that plan to "spread the responsibility for taking action among all the stakeholders: the auto and petroleum industries, government, and especially vehicle purchasers and users". The problem I see with that is several auto companies have created alternative energy cars. Plus comsumers are readily buying them that the car companies can't produce them fast enough. Not too long ago, after the first major rise in gas prices there were commercials from several gas companies (Shell and BP to be specific) taking about alternative energies that they were researching, and promoting to other companies. So I would say that those industries are already acting to find ways to better help the general public.
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