I got a lot of responses to my Friday newsletter on restricting the supply of fossil fuels, one of which said “oof no” in the subject line. It was from an economist named Benjamin Ho, who wrote that he usually likes my newsletter, “But, oh boy, was today’s off track.”
I wrote that while a ban on production of fossil fuels would bring the economy to a halt if enforced right away, “a ban or severe restriction isn’t entirely crazy, either, if it’s phased in as part of a long-term plan to reduce emissions of greenhouse gases to zero.”
I’ll get to the readers who loved the idea as well as those who hated it, but I’m starting with Ho because his challenge was strong. He is an economics professor at Vassar College and was the lead energy economist for the White House Council of Economic Advisers in the George W. Bush administration.
The United States is such a big producer of fossil fuels that if it abruptly banned or restricted production, the reduction in supply would drive up the world price of oil, curbing demand. That’s the good part. The bad part, Ho wrote, is that “banning fossil fuels in the U.S. just increases profits to OPEC countries that don’t abide by the ban and encourages them to drill for more oil.”
A better fix, he argued, would be a tax on the carbon content of fuels, regardless of where they’re produced. That, he wrote, “would allow efficient low-cost producers in the U.S. to continue to compete and operate, and would lead to huge amounts of tax revenues that could be used to compensate low-income families” who couldn’t afford the costlier fuel.
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He agreed that there’s little to no appetite in the United States for a carbon tax or, similarly, a system of tradable emission permits. But “I don’t think a ban is any more popular,” he wrote. The implication being that since neither solution is popular, you might as well go for the one that is economically superior.
I asked two of the people I cited in my newsletter for their responses to Ho. They both said the aim should be to decrease the demand for fossil fuels in tandem with measures to restrict the supply of them. “It’s not clear to me how the U.S. phasing out both supply and demand for oil would create massive new demand” for oil produced elsewhere, Emily Grubert, a civil engineer and environmental sociologist at the University of Notre Dame, wrote.
Mark Paul, an economist at Rutgers University’s Bloustein School of Planning and Public Policy, wrote that he’s a “huge advocate” of putting a price on carbon, as Ho is, but “we simply need to consider a far broader swath of policy tools to facilitate rapid decarbonization.” He wrote that if the United States decreased its demand for fossil fuels but didn’t simultaneously curb its production of them, there would be an oversupply that would cause world prices to fall and foreign demand to rise.
Frederick Hewett of Cambridge, Mass., mentioned a possible solution to the problem Ho raised. He wrote that 12 nations and 103 sub-national governments have already endorsed the Fossil Fuel Nonproliferation Treaty Initiative, which seeks a binding plan to manage the global transition away from fossil fuels. He did acknowledge that the treaty faces “stiff headwinds.”
Marvin Berkowitz of Needham, Mass., who also liked the newsletter, picked up on the arson metaphor that I used, writing: “Our homes are burning. We mustn’t merely arrange the furniture — we need to put out the fire.”
A reader from Washington, D.C., a former Texan, wrote: “We wear, look through, sit on, look at, et cetera, products made from fossil fuels. Petroleum is too valuable a manufacturing ingredient to squander it burning it up in smokestacks and tailpipes.”
On the negative side, Christopher Brandow of Pasadena, Calif., wrote that the public, not just the oil and gas lobby, would be infuriated by supply restrictions. “Polling showing support for action on climate change is a mile wide and inch deep,” he wrote.
Steve Andrews of Florence, Colo., wrote that “the lower-income folks in this country would be penalized for not being flush enough to be early adopters” of energy-saving technologies such as electric vehicles and heat pumps. “You say policies could be designed to overcome that issue,” he added. “I’m not at all convinced.”
Larry Mizzau of Victoria, British Columbia, wrote: “As a retired chemical engineer with a long career in oil and gas and a keen interest in energy, I can tell you with confidence it’s not the petroleum industry lobby that is the problem. It is the simple fact that petroleum is an extremely integral part of most of our society.” He said ordinary citizens could make things better by driving smaller vehicles, eating less meat and living in smaller homes.