An interesting discussion at the Freakonomics blog about exactly why rising petrol prices cause people concern. Justin Wolfers argues from an economic standpoint that it probably shouldn’t be as troubling as it is for people.
But what seems more important to me are the questions about what people attribute their frustration to and the choice of actions to alleviate those frustrations. My perspective – rising prices should be seen as the inevitable outcome of the fact that a non-renewable resource is being consumed at an increasing rate. Tinkering with taxes, attempting to ramp up the rate of production, and other measures are not going to produce meaningful long-term change to the issue. The most plausible way to do so is to begin, as soon as possible and as quickly as possible, to explore options that reduce our consumption of and reliance on that scarce resource.
That entire argument can be made without reference to environmental issues. Add to the equation the greenhouse effect, the need to reduce carbon emissions and the impact of attaching a cost to such emissions on prices, and the case becomes stronger.
