Right. Which is just an example of the fact that the only sensible approach is to impose the carbon cost (tax or trade) as it comes out of the ground. So how much increase in the price of carbon do you need to get people acting on efficiency, and switching to alternatives, and even going broke? The answer is that we've already had that much and more because of peak oil, and gas and coal have followed oil up. The world economy is in free fall at the moment because of this. However the oil price has overshot (because demand destruction takes longer than the time frame in which this oil shock has hit). So the oil price will soon come back down temporarily [wait for the ignorant to say the bubble has burst]. When you look at this point it now becomes obvious how to combine peak oil response with carbon mitigation: Use a carbon tax to put a floor under the price of fossil fuel, and keeping moving the floor up. This means that the incentives for switching and efficiency are maintained instead of yoyoing with the oil price. The money raised should be used to build the best possible non-fossil fuel energy infrastructure, whatever that is.