Prices work, no, honestly, they do
Energy is higher in price now than it was last year - people are changing their behaviour:
The owner of Kleenex and Andrex is to power its lavatory paper factories using “green” hydrogen as Russia’s invasion of Ukraine pushes natural gas prices to record levels.
Kimberly-Clark will buy green hydrogen made from wind and solar power as part of a deal with renewables company Carlton Power for its factory in Barrow-in-Furness in Cumbria, which it claims will reduce its reliance on natural gas by 30pc.
Whether that’s entirely the way to go we’ll leave to Kimberley-Clark to work out. But it does show that changing prices changes peoples’ behaviour.
Equally, there are now those predictions that some vast majority of the population will be in fuel poverty this winter - spending more than 10% of household income on heating. They won’t be of course. For behaviour will change. Heating will be turned down - perhaps as far as was commonplace half a century ago when central heating was still a novelty - because prices change peoples’ behaviour. Don’t forget, that definition of fuel poverty is not what people do spend, it’s what they would spend to reach a certain level of heating.
The aim this past couple of decades has been to try to change peoples’ energy consumption - in both type and volume. We’ve been told that this all hasn’t been happening fast enough, that there must be more plans, more intervention, to make it all go faster. Now here we are having changed prices and we’re getting a tumbling rush to change type and volume of energy consumption.
As we’ve been saying all this time it might well have been simpler to use prices - for as we can see they work - all along. Rather than the planning which has led to this emergency surge we could have had a gentle and far less disruptive change over time. Not that this is just us, it’s the same thing the Stern Review said, it’s what Bill Nordhuas got his Nobel for pointing out.
If you want to change what everyone does then change the thing that everyone faces - prices.
The only mystery left is why everyone in power entirely ignored the science on this subject.