PHYSICAL LIMITS ON THE USE OF ENERGY RATHER THAN THE SUPPLY OF ENERGY.
PHYSICAL LIMITS ON THE USE OF ENERGY RATHER THAN THE SUPPLY OF ENERGY. Kids, economists have typically responded to Limits of Growth arguments by emphasizing the importance of substitution—consumers and producers will substitute other ways of making or saving energy in response to a shortage of traditional forms of energy. The Finite Physicist lets the Exponential Economist make the point: “Sure, conventional fossil fuels are finite. But we can substitute non-conventional resources like tar sands, oil shale, shale gas, etc. By the time these run out, we’ll likely have built up a renewable infrastructure of wind, solar, and geothermal energy—plus next-generation nuclear fission and potentially nuclear fusion.” Contrary to the Finite Physicist, who argues that the price of energy would go down over time, I think that economists would argue that the substitution would be driven by higher prices for energy and energy substitutes as energy became more scarce. The thermodynamic argument takes away the argument that there will be alternative supplies of energy, but it does leave room for the argument that people will make substitutions that reduce the demand for energy.