[Editor Note: This reprint of a February 2009 post by Robert Murphy at MasterResource is back in play regarding the self-styled conversion of Jerry Taylor from skeptic to climate alarmist. Taylor, a principal at MasterResource at the time, was well aware of the Martin Weitzman argument (below) but claims he was introduced to and converted by it years later.]
The funny thing about carbon pricing is that even if you take the latest IPCC report as gospel, and even if you assume all of the governments around the world implement a perfectly efficient carbon tax, even so the “efficient” carbon tax ends up being fairly low for a few decades, and then it ramps up as atmospheric concentrations increase. (See William Nordhaus’s new book treatment of his “DICE” model for an excellent exposition.) …
“Falling commodity prices in general are a good thing in a free market because, as economist Ludwig von Mises emphasized, the sole end of production is consumption. Consumption first, production second. Also the US is a net importer of both oil and natural gas, which means we consume more than we produce. So provincially speaking, the US gains more than it loses from well-to-pump or well-to-burner-tip price drops.”
Business consultant Carlos Lara and I produce a monthly financial publication, the Lara-Murphy Report, which highlights the Austrian School of economics in both academia and the financial markets. The January 2016 issue interviewed Rob Bradley of Houston, Texas, who was trained in Austrian-school economics and is a longtime historian of oil markets. This interview is reproduced below.
Robert L. Bradley Jr. is the founder and chief executive officer of the Institute for Energy Research (IER), a 501(c)3 educational foundation with offices in Houston, Texas, and Washington, D.C.…
In 1979, Robert L. Bradley Jr. contracted with the Cato Institute to write a history of U.S. oil and gas regulation. Cato did not have an energy position yet in Washington, D.C. (that came a decade later) but was very interested in the subject. Indeed, with debilitating natural gas shortages in the winters of 1971/72 and 1976/77, and oil shortages during 1974 and 1979, the policy landscape was ripe for free-market energy analysis.
What began as an 18-month project turned into a four-year, six-months relentless research-and-writing effort. Finding a publisher for what would be a two volume, 2,000-page treatise proved difficult. Bradley revised the manuscript during the decade delay, although leaving the cut-off year at 1984. Rowman & Littlefield published the work in 1996 as Oil, Gas, and Government: The U.S.…