No, not “an economist”, the magazine. In a long discussion of winners and losers from low oil prices, we find what has to be the stupidest assertion in a mainstream publication this month, maybe even ever, who knows:
But the overall economic effect of cheaper oil is clearly positive.
Really. This is hard to even talk about without insulting the intelligence of our readers, but it’s in The Economist, for Pete’s sake. How does that work? Does The Economist think ‘overall economic effects’ just end in a few decades, before the, um, economic effects of climate change really kick in? Has a radical Christian sect with a line on the rapture schedule taken them over? Or has the law of demand been repealed when we weren’t looking, so lower prices cause people to use less instead of more?
Sheesh.
flashinjapan says
I think the article is pretty clearly talking about short/medium-term economic effects in which pricing based on supply/demand rather than the long-term sustainability of an international cartel is more efficient. I'm as pro-do-something-serious-about-climate-change-right-now as anyone, but whether or not extracting and burning all the oil ASAP is a net plus or minus for the economy in the long term is impossible to project… in that you can make more-or-less reasonable assumptions and come down on either side. I think basically all effort towards calculating economic costs/benefits of climate change out hundreds of years is a huge waste of time, so I don't expect every economic perspective on America/Canada V. OPEC beef to partake in it.
JamesWimberley says
On what assumptions does it come out OK when you burn all the oil and coal? The models for that aren't on-the-one-hand-this and on-the-other-hand-that : they point unambiguously to an unliveable world. It's no part of the expertise of climate scientists, but catastrophic impacts on the world food supply would challenge human civilisation (including that part of it we call the economy), It's possible we could get the end of human life, if the positive feedbacks go the wrong way. If we are lucky the collapse of industrial civilisation and mass death will precede the locking-in of completely unliveable consequences, so a few million subsistence farmers may survive, We are talking either way about the death of billions of people.
doncoffin64 says
Yeah, just re-write is as: "But the overall "SHORT-TERM" economic effect of cheaper oil is clearly positive." And delete the "clearly."
Doug r says
If it means they shut down the bitumen tar sands plants that take what 6 barrels of water and how much natural gas produced by fracking of course to make one barrel of oil at a net cost about $75 a barrel, then yes, it could be a good thing