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Instead, we will see a continuation of what we have seen in recent years with prices of commodities like oil rising rapidly in real terms which will shift behavior and encourage alternative energy production.

I do not know how rapidly the climate will shift. I doubt there will be a literally overnight shift, but my guess is that it will be much faster than most people think, and that we will not have time to adjust. We have had several decades to adjust, and some people now use compact fluorescent light bulbs, and those rich enough now drive a Prius, or move to cities with acceptable public transportation. But while this may make some superficial environmentalists feel better, it cannot compete with the fuel demands of electric power plants, heavy chemical industry, the military, and luxury airline travel. Until we are willing to forego these luxuries, I am afraid meaningful change will not occur.

I am not saying that market forces alone would be capable of achieving the goals of those concerned about climate change. But I am quite confident that market forces will prevent the world from waking up one day and suddenly realizing that we're almost out of carbon based energy. For example, if we wake up tomorrow to $15/gallon gasoline, all hell will break loose but if the real price of gasoline rises by $0.50/gallon per year for the next 22 years and we arrive at $15/gallon gasoline (in 2013 dollars) by 2035, people will have time to adjust.

The trouble is not that some day people will wake up and suddenly realize we are out of carbon energy. The trouble is that we will not run out of carbon soon enough, and the destruction of the environment will precede the exhaustion of carbon.

The rich will probably always be able to afford it even if it is $50/gallon. But the poor already have do do without automobiles and greatly restrict their lives. I have a friend who can no longer baby sit for a living because her car is unfixable at today's prices with her low level of income. She heats her house to about 45F to keep the pipes from freezing and is sick most of the time because her house is too cold in the winter even though she wears multiple sweaters, has multiple blankets on her bed, etc. And she cannot afford to go to the doctor. So she is already suffering from high prices of fuel, food (with its embedded fuel costs), medical care, etc. The things that will change is that suffering such as hers is slowly moving up the economic ladder. A revolution will come to the USA last, but it will come.
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