Much wailing and gnashing of teeth has attended the rising oil price, but it's not entirely clear why. Of course there are some immediate problems, but price increases make solutions economic.
Firstly, they make people use less. The Guardian led on this yesterday, but couldn't quite bring itself to argue that supply and demand appears to be working. Mark you, the Guardian has rather blotted its copybook this week with a long print supplement on Wednesday which extolled the virtues of using less resources in 6 A2 pages
Secondly, it makes other sources of energy more economically efficient, and makes the returns on investment in R&D a better bet. The Economist this week has an excellent supplement.
Of course, this isn't quite a painless as it sounds, and I am insulated from this, being well paid and living in a city without a car. However, it's not going to be a painless transition, so there's not a lot we can do about it.
So aren't price rises what we want?
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