Our word, really? But, but, that would mean that prices work!

From the frontlines of the war on climate change:

Car buyers’ interest in electric cars has surged across Europe since the start of the war in Iran, as the rising cost of petrol highlights the cheaper power available from a plug.

Online marketplaces in the UK, Germany, France and Spain reported huge increases in inquiries about electric vehicles since the start of the conflict in February.

This means that prices work. Yea, even as a method of beating that civilisational threat of climate change.

As, of course, Mssrs. Stern and Nordhaus pointed out. Put the coming cost into prices and people will do those things that are worth doing to beat it. Our aim, obviously, is to maximise human wellbeing, human utility, over time. This means doing those things that are worth doing - where benefits in increased wellbeing are greater than the costs in reduced wellbeing - and not doing those things that are not worth doing - where the disutility is greater than the increase in utility. Once these costs are in prices - a simple carbon tax is the way to do that - then every decision taken by everyone, everywhen, is taken facing the incentives of those costs. We get the right amount of climate change that maximises human utility over time.

Prices work.

Even at this late stage it’s still possible for us to adopt the correct solution if this is indeed a problem that needs to be solved. We therefore get to kill off large parts of the regulatory state and confiscate many hundreds of thousands of lanyards. At which point our little pitch for the only job we actually desire in government. Can we, please, be in charge of issuing those necessary P45s? Not because we’d be particularly good, nor bad, at the job but just because we’d enjoy it so.

Tim Worstall