Peak Oil and Peak Water

Anti-Dismal has a pointer to an article about why we are coping with scarce oil, but struggle with water shortages.

But why is there such a contrast? The answer is of course markets. We have them for oil but not, by and large, for water.

This is of course true. We pay the same whether we use no water or lots. Since our rates are so obscenely high, our family tries to get value for money by watering the lawn and having long showers.

Environmentalists haven't even acknowledged that the market for oil can cope with changes in supply and demand. Even with oil at $140 (perhaps especially with oil at that price) environmentalists bleated on that the world was running out of oil. Surely they could acknowledge that at some price, there is plenty of oil. For example, at $1000 a barrel we would all be walking and oil would be viewed only in the museums. Conversely, at that price all the dodgy oil countries would presumably be invaded and their hopeless state-owned oil companies replaced with efficient ones, thus massively increasing oil output, and reducing the price down to $10.

Now that oil is falling below $100 (currently $96), the urgent desperation of companies to massively increase their oil production where possible has presumably subsided a bit, although it will still be important. Were oil to fall to $60 a barrel, then many of the schemes cooked up in the past few years may actually close down.

Anti-Dismal: you need to get out of the university and into schools! It is scary for me to see how much children know about conservation, and how little about economics.

Comments

[Paul Walker]

"Anti-Dismal: you need to get out of the university and into schools! It is scary for me to see how much children know about conservation, and how little about economics."

Your point is well taken. The general level of understanding of economics by children and most of their parents is not great. It's a problem which will be highlighted this year with the election. But it's not clear how you deal with it. Economics is already offered at most schools for those who want it and there is a lot of material out there for the general reader, books, blogs etc. The problem is people don't read it.

[The Optimist]

I see this as separate from teaching economics as a subject. In my view they should teach a few basics in primary school as part of the normal syllabus. For example:

- supply and demand
- why milk costs what it does
- how world prices affect local prices
- what taxes and subsidies do to prices
- who actually pays the cost of regulation

These should get progressively move advanced from the age of 7 to 12 so that at the end children have every bit as much knowledge of this as they of the polar bear.

(my list is a bit arbitrary, just things I get annoyed about)

I reckon this could be taught in a very simple way to lots of kids and benefit the country. It doesn't need to be made particularly interesting, either. We already teach kids lots of boring stuff. But to add interest we could visit supermarkets, currency markets, etc.

[Daniel Wilson]

I thought you might be interested in this recent report: http://www.bloomberg.com/apps/news?pid=20601087&sid=ayLSMCD585X8&refer=home%20%20%3Cbr%3E

[The Optimist]

Good to see that it is progressing well. I have just added a post about it. Thanks for the link.