The Oil Drum

The debate on the realities of both climate change and Peak Oil has moved from 'are they real?' to questions concerning timing, magnitude and impact. At the same time, expanding research in 'temporal discounting' in economics (called 'impulsivity' in psychology), is shedding light on how steeply we value the present over the future, a trait with ancient origins. Knowing this tendency, how can we expect factual updates on peak oil and climate change to behaviorally compete with Starbucks, sex, slot machines, and ski trips? Science is rapidly increasing our knowledge about the planet. To affect change however, we might have to become equally knowledgeable about ourselves. Below the fold is an overview on human discount rates, their evolutionary origins, and their relevance to the mitigation and adaptation to climate change and peak oil.

"Dumbo, caught obsessing about higher planetary CO₂, did not leave any descendants"

On this third installment of the Contrarian Arguments series we’ll address the "Markets Will Solve It" claims.

A regular economist will tell you a fable like this:

If a shortage of potatoes occurs either by lack of supply or by growth on demand the market price will rise. This new higher price will signal to the farmers a need to produce more. Supply will rise, meeting demand, lowering the price and bringing the market back into balance.

Let’s see what’s wrong with this apparently correct logic.