A challenge for the peak oilers

From Matthew Kahn at the Environmental and Urban Economics blog:

When energy prices rise, how do energy consumers respond? The New York Times today summarized some new empirical work that has the optimistic punchline that people do respond to price and social incentives to conserve. At the end of this article, there is a brief discussion of the Induced Innovation Hypothesis. Ituitively, this hypothesis posits that for profit firms do more "Green R&D" when energy prices are high in order to market products such as air conditioners or cars that are less energy intensive. Economists continue to try to measure the size of these induced innovation effects but it seems that Peak Oilers do not believe they can be large.

The rest of the post contains the very good NYT article.

Comments

[joshua corning]

"IN the case of electricity, waste is glaringly apparent. About 5 percent of the electricity consumed in United States households is simply lost to computers, televisions and other appliances that are turned off but still plugged in."

Now if only computer makers would make computers that booted up in an OS stored on flash memory (fast) rather then a hard drive (slow) people would have more of an insentive to shut down thier computers when they are not in use....and i would be happy becouse i hate to wait for the dang thing to start up.

Apple did something similar for awhile with the early macs...it wasn't flash but hard coded on chips. Sadly this idea never took off becouse it prohibited OS upgrades...but now with cheap flash memeory, which can be easily upgraded, this problem seems to be less of a issue.

[odograph]

Who do we call "peak oilers" these days, do they have to be the die-off folks, or just those like me who think we will see economic disruption?

Since GM is already downgraded, due in large part to a misaprehension of the peak oil curve, I think the moderate position is already demonstrated. Next question.

[odograph]

P.S. - The serious answer is that the measure of calamity is determined by two rates: rate of adaptation, and rate of oil production

I think recent news has been relatively positive, in that it has demonstrated rates of adaption, but we don't really KNOW how the rate of adaption will really play against the actual (unknown) rate of oil production decline.

[Cian]

I found this comment a little odd:
"Amory B. Lovins, chief executive of the Rocky Mountain Institute, a nonprofit energy research group in Snowmass, Colo., says that a barrel of oil today already does twice as much work as it did in 1975." I really can't see how he made that calculation.