UC Davis economist Greg (“A Farewell to Alms“) Clark had a forum piece in the Sacramento Bee last weekend on what life would be like in a world where oil is becoming scarce and ever more expensive, when we will be looking back with nostalgia at $3.5o for a gallon of gas.
His take? Not so bad. “…we can live happily, opulently and indeed more healthily, in a world of permanent $100-a-barrel oil or even $500-a-barrel oil.”
Fossil fuels will be replaced with essentially unlimited (but more expensive) solar energy, he predicts. There will be a short-term hit to incomes — but economic growth will make it up in less than a decade. More expensive energy will rein in suburban growth and people will revert to higher-density living, with more walkable cities, citing Manhattan and parts of London as cities that are high-density and yet extremely rich.