Hanging out on Libera.Chat the other day I mentioned that energy is undercosted. The other people replied that no, it’s undercosted, fossil fuels are fine, tech will fix it. So I’ll try to explain myself in more detail here.
Energy is undercosted because transaction externalities like pollution and climate change aren’t fully factored in. If I buy a can of gas, I don’t have to pay for all of the cleanup of what happened when producing that gas and what will happen when I burn that gas.
We currently as I write this in December 2023 don’t have the capability of dealing with all those PPMs of CO2E that we’ve blasted since the start of the industrial era (most of that in the past 30 years. That’s right, we became aware of the problem but then immediately doubled down while the beer-holders could only watch in horror).
Dealing with the effects of the greenhouses gases is important & urgent.
One of the currently-available cheapest way is to leave it in the ground.
This comes in two flavors:
OK, that’s great. There’s a whole futures market there. If I believe tulips are gonna be cheap I can sell the right to tulips I haven’t bought yet but I promise I’ll buy them and then you’ll get them. This is called shorting, a good way to make money if you gambled correctly (and get absolutely ruined and wrecked if you gamble wrong). It’s similar to gambling at the horse races, it doesn’t create any real use value, it’s just numbers moving around on accounts, no-one gets real food or real shelter or real care out of it, but as a gambling system, it does work and is an emergent property of the core premises of market capitalism. (I might say it’s a bug.)
However, that doesn’t mean that the tulips are cheap now. The prices now should be based on the availability now. And that goes double especially when considering the true cost, not just market price, of fossil fuels.
We’re not currently sequestering greenhouse gasses at the scale & bandwith we urgently need, and it’s not yet proven that there’ll be a way to do so. Hence, to as great an extent as possible: leave it in the ground.
Just the other day the world broke new emissions records. We’re moving in the wrong direction.