I just came across a talk I gave at the Naval Postgraduate School in my last few months on the faculty. It’s titled “Will We Run Out of Energy or Other Resources?” Short answer: No.
It’s here.
I haven’t done my usual time stamping. But my favorite part is about the Julian Simon bet. It starts at 15:16 and my favorite slide is at 21:23.
The $10,000 bet that I offered Paul Krugman is at 29:16.
At around the 35:00 point it segues into Q&A.
READER COMMENTS
Alan Goldhammer
Feb 22 2020 at 5:32pm
I was just reading Warren Buffet’s letter to shareholders (disclosure: I’ve been a Berkshire shareholder for a lot of years) and he was commenting on Berkshire Hathaway Energy who generate huge amounts of electricity from wind. He notes that in 2021, the company will produce enough wind power electricity to serve ALL of their Iowa customers (25 million megawatt hours)!! This was unthinkable at the time of the Julian Simon bet and shows how technological advancements can change things in unpredictable ways. This quote is especial interesting:
“Prices for residential customers have since risen less than 1% a year, and we have promised that there will be no base rate price increases through 2028. In contrast, here’s what is happening at the other large investor-owned Iowa utility:Last year, the rates it charged its residential customers were 61% higher than BHE’s. Recently, that utility received a rate increase that will widen the gap to 70%.”
The Green New Deal that some are campaigning on is being realized without any Congressional action at all!!!
Thaomas
Feb 23 2020 at 9:12am
Whether we will “run out” of resources depends on whether their production and use is mediated by markets. We will not run out of mineral ores and arable land because there are market for them. We are in danger of running out of fresh water and already running out of atmospheric net CO2 absorption capacity because there is no market in these items. In the latter case, the longer we go without a market price for CO2 emissions the more likely we are to get non-market “solutions” like the Green New Deal and it’s European counterpart.
Jon Murphy
Feb 23 2020 at 10:20am
Of course, if there is no market, then it is quite impossible to set a Pigouvian tax, which subsequently implies that “market-based” solutions like taxes or cap-and-trade are a misnomer; they’re just another application of the Socialist Calculation Debate.
However, you make a crucial mistake: the choice is not between no-market-total-depletion and total-government-control. There are all sorts of ways people come together to govern the commons.
Thaomas
Feb 23 2020 at 9:56pm
To paraphrase Fermi about a universe supposedly teeming with alien life, “Where are they?”
David Henderson
Feb 23 2020 at 10:49am
You write:
That’s one of my main messages in the speech I linked to.
Thaomas
Feb 24 2020 at 7:09am
Yes, it’s good economic common sense that I don’t see many people applying to traffic congestion, water, and CO2 accumulation.
David Seltzer
Feb 25 2020 at 4:03pm
Not as long as we rely on incentivized human capital and free market allocation of resources via price mechanisms.
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