A mistake by oil producers may be what SD needs

My firm belief is that the oil producers have made a serious business mistake in setting their prices so high. Their mistake is exactly what the Sustainable Development movement needs.

There are articles all over the world indicating a sudden shift in spending patterns. People are now buying smaller cars and resorting to public transit. Suddenly, locally produced products have gained the attention of consumers and demands are being made on large supermarkets to buy greater amounts of local foods.

Finally, in this article (http://www.guardian.co.uk/environment/2008/jun/16/renewableenergy.energy?gusrc=rss&feed=networkfront), we see that alternative sources of energy which were once considered prohibitively now seem more relatively affordable.

Many editorials state that the price of oil is artifically high. Judging from the growing levels of profit by the oil producers, I would tend to agree. The result is that people are moving over toward greener solutions and – once you go green – you never go back )


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5 comments on “A mistake by oil producers may be what SD needs
  1. jsitu79 says:

    Just to add to your point, John Cooper analyzes the price elasticity of demand on crude oil for 23 developped countries in the March 2003 issue of OPEC Review. The short-run elasticity for Canada is -0.041 while the long-run elasticity is -0.352. Most countries’ long-run elasticity ranges from -0.2 to -0.5, but China’s is zero. While these elasticities may still be consider inelastic, the increase price of oil compounded by the increased environmental awareness will definitely have more and more of a green impact especially as we move towards the long-run.


  2. pdg2 says:

    In addition to Jerry’s point about the price elasticity of demand being inelastic for oil: I agree that higher oil prices may lead to some changes in behavioral patterns (i.e. driving smaller cars, taking public transit, which reduces the overall emission of greenhouse gases). Nevertheless, I think it will be extremely difficult to get away from oil for both producers and consumers.
    Our dependency on oil may be worse than we think, since oil is used to produce hundreds of other products as well, such as plastic, detergents, drugs, and appliances, etc…


  3. jsitu79 says:

    In addition to Paul’s comment, someone (I wonder who 🙂 )just put up a fantastic blog on bioproducts (https://sdca.wordpress.com/2008/06/18/boiproducts-%e2%80%93-current-sunlight-replacing-ancient-sunlight/). This might be a solution to wean us off oil.

  4. fsingcaster says:

    There is no doubt that higher oil prices will encourage people to move to other alternatives or change their behaviours, and the higher the prices, the faster this will happen. That, in turn, will drive companies and entrepreneurs to look for new alternative solutions to replace oil in the long-term (and this will almost certainly also include oil companies, if they think of themselves as “energy” companies). The question is how fast this can happen, as an equilibrium may soon be reached that will placate much of these efforts after individuals and producers have made their basic adjustments (producers are not that blind). People get PO’d, but also forget quickly. I definitely believe that we will begin moving away from oil in the near future, maybe within the next 20 years (I hope), but don’t think we have the actual technology developed or even identified yet (yes, hydrogen is a candidate, but there is no solid movement in that direction yet and there are still some technical issues to be resolved – and, as a note, for more static uses, solar power will apparently be competitive by 2050 at the latest, so this may be coming of age). Can’t comment about products that use oil, but the quantities involved are so much smaller that the price increases may not matter much (plus if oil demand goes significantly down over time, then prices should go down too, alleviating that specific cost problem). Too bad most if not all of us will not live to see nuclear fusion… Btw, anybody else find it interesting that the CAW, a big supporter of GW efforts, has been protesting so vehemently the closing of that truck plant in Ontario (notwithstanding the slight obvious and inconsequential hypocrisy, shouldn’t they at least have seen this coming???)

  5. penczek says:

    I think that oil price is affected by speculators and its growth has no impact on introducing SD in a long term.

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