Author: billboyd

If there’s one thing everybody knows about carbon pricing, it’s that there’s not much effect on consumption of transportation fuels. In econ-speak, the explanation is that demand is very inelastic: a price increase of (say) 10 percent reduces consumption by much less than 10 percent. In plain English, the explanation is that driving is something that people “have to do”, so price changes don’t have much impact on how much driving people do. (more…)