Can the world economy recover with rising oil prices?

[famousringo]

TheRealMafoo said:

NJ5 said:

I really hope that governments don't stop whatever they're doing to move away from oil, using low energy prices as an excuse to postpone the solutions. I'm unsure governments were doing enough as it stood before the recession, now they could be doing even less, threatening our future.

 

What does this have to do with government?

I hope gas gets to $10.00 a gallon. if that happens private industry will do more in 1 year then all the governments in the world could in 20.

I agree with you somewhat, but government is heavily involved in regulating, administrating, taxing and subsidizing many portions of the energy industry. A government which is sensitive to the way things are changing can smooth out the transition, while a government which is slow to respond can make an enormous challenge even more painful and daunting.

There are two big changes which governments should make that spring immediately to mind. First, this recession is a great time to spend big money to upgrade the power grid to a network sophisticated to enough to handle the micro-generation which is going to be the way of the future. Stimulate the economy while preparing a key part of our energy distribution system to handle the small producers who exploit localized sources of renewable energy which would be subject to interruption by bad weather or seasonal shifts. Aggregation will be essential to smoothing out such fluctuations in the power supply.

The second is to shift the funding, tax breaks and other inducements which go to non-renewables over to renewables (note: this would obviously raise the price of non-renewables). Obama doubled funding for renewables in his latest budget, and inducements for fossil energy producers were still almost ten times as high as those for renewables. And for the love of God, target this funding towards solutions that have actual potential. Don't court rural votes by subsizing biofuels from corn and other food crops. Target things like wind, solar, geothermal, and biofuels from waste.