Shouldn’t Environmentalists Be Happy About High Oil Prices?

Why do politicians who want to fight climate change by reducing our consumption of oil get angry when the price of oil increases? They condemn the oil companies for price-gouging and threaten to tax away their profits unless they reduce their prices. If your goal, however, is to get people to use less oil, the best thing greedy oil corporations can do is to price-gouge the citizens. As Thomas Sowell states, “There is perhaps no more basic or more obvious principle of economics than the fact that people tend to buy more at a lower price and less at a higher price” (p. 28). If oil prices skyrocket, then people consume less oil and seek cheaper forms of alternative energy. Yet politicians take the logically inconsistent position of wanting people to use less oil but also claim to want to lower its price. I wonder if this inconsistency is intentional; politicians do everything in their power to make fossil fuels more expensive, and then earn votes from the working-class by blaming big business. 

Reference

Thomas Sowell (2014). Basic Economics: A Common Sense Guide to the Economy (5th edition). Basic Books.