Why the Price of Gas Needs to Stay High


People who rely on unsustainable energy sources tend to complain about the price of their energy (despite the subsidies they receive). We need to stop listening to those people who only want the dangerous status quo to continue. The price of fossil fuels have increased this year for a few reasons, with the price not being reflective of market costs due to government intervention.

In order to advert climate destruction we need to encourage politicians to not let the price of gas decline.

First, consumers will not accept high prices if it means high profits for fossil fuel companies. Maintaining high prices for consumers must be complemented by a radical overhaul of the taxation regime facing fossil fuel companies, not just one-off windfall taxes. Those taxes would maintain high consumer prices even though the fossil fuel companies wouldn’t actually receive very much—enough to cover reasonable costs, but not enough to invest in further fossil fuel production. As the International Energy Agency has pointed out, to achieve net zero by 2050, the amount of investment needed in new oil and gas production is zero.

Second, consumers will be much more willing to accept higher prices for fossil fuels if the additional tax they pay is returned to citizens as an equal carbon grant. Alaska has done something similar, putting a share of oil revenues into a “permanent fund” which it then distributes through a cheque to every household each year (though this approach can go wrong—in Alaska politicians ended up cutting public services to maintain payments from the state fund).

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