High Fossil Fuel Prices Are Good For The Planet – Here’s How To Keep It That Way

High Fossil Fuel Prices Are Good For The Planet – Here’s How To Keep It That Way

High Fossil Fuel Prices Are Good For The Planet – Here’s How To Keep It That Way
High Fossil Fuel Prices Are Good For The Planet – Here’s How To Keep It That Way

In the UK it is now costs over £ 100 refuel a typical family car with gasoline and oil prices can climb even further. But are such high fossil fuel prices bad? While the focus is on measures to combat the global cost of living crisis, much less is focused on the very inconvenient truth – tackling the climate crisis requires that fossil fuel prices for consumers remain high forever.

To say so may seem deaf. Millions of households in rich countries are faced with a choice between heating and food. In poorer countries, the situation is immeasurably worse. Rising gas prices have dramatically increased the cost of fertilizers, and the war in Ukraine is hampering its wheat exports.

Together, this will lead to rising food prices in the world, causing a surge in inflation and worsening the already difficult food security situation in places like Yemen, the Horn of Africa and Madagascar. We are already watching ubiquitous foot riots just as in the period from 2008 to 2011, when citizens around the world protested against the failure of their states to ensure their most basic right – the right to food.

To mitigate the effects of high prices, we are witnessing a drastic change in energy policy around the world. In November 2021, governments at the COP26 climate conference in Glasgow pledged carbon taxation and elimination of fossil fuel subsidies. But faced with a sharp rise in the cost of fuel and electricity, the same governments rushed to it reduce energy taxesimpose price restrictions and introduce new subsidies.

But to maintain global warming below 1.5 ° C will be needed a sharp reduction in fossil fuel usestarting from this point. The unfortunate reality is that one of the most effective ways to get people to use less fossil fuels is to ensure that it is expensive.

Of course, the best way to get away from fossil fuels is to have better (and preferably cheaper) alternatives. But investment in these renewable alternatives will only happen if people clearly switch to them, and this requires that consumer prices for fossil fuels remain high.

Inciting riots

Of course, high fossil fuel prices are usually unpopular and can even lead to unrest. In the period from 2005 to 2018 41 countries had at least one riot directly related to public demand for fuel. In 2019 alone, major energy protests took place in Sudan, France, Zimbabwe, Haiti, Lebanon, Ecuador, Iraq, Chile and Iran, many of which escalated into riots.

My colleagues and I recently published research showing that these riots are caused by price spikes, often after fuel subsidies have been lifted. These price spikes sparked fuel riots when citizens felt it was so there are no other options for the fact that they expressed their anger over the policies and actions of the government (or when states tried to forcibly suppress them in doing so).

High prices, satisfied citizens

Is it possible to maintain high fossil fuel prices without causing unrest? The key is to keep consumer prices high by increasing fuel taxes if international oil and gas prices eventually fall. Two things are needed to make this politically acceptable.

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 tax regime faced not only by fossil fuel companies. one-time income taxes. These taxes will maintain high consumer prices, even if fossil fuel companies don’t get very much – enough to cover reasonable costs, but not enough to invest in further fossil fuel production. As noted by the International Energy Agency, achieve net zero by 2050the amount of investment required in new oil and gas production is zero.

Second, consumers will be much more willing to agree to higher fossil fuel prices if the additional tax they pay will be refunded to citizens in the form of an equal carbon subsidy. Alaska has done something similar by putting a share of oil revenues in “permanent fund”Which he then distributes through a check to each family each year (although this approach may go wrong – in Alaska politicians have found themselves reduction of utilities to maintain payments from the state fund).

Obtaining an annual payment equal to the taxes imposed to maintain high fossil fuel prices will mitigate the damage from price increases. It would also be progressive, as those who consume the most fossil fuels will pay more tax, while those who consume the least will pay less but will receive the same payout from the fund and thus ultimately the result will be a profit. Additional compensation may be needed for poor groups with a high level of fossil fuel use, such as low-income people who are forced to use their machines for work.

Rising energy prices are a disaster for poor consumers around the world. But, ironically, they also provide an opportunity to push the world away from dependence on fossil fuels. If we take this opportunity to make fossil fuel prices consistently high, we will be able to accelerate the transition to cleaner energy in a fair way for all and prevent deeper crises in the coming years.

This article is republished from Conversation under a Creative Commons license. Read original article.