Reporting on the recent crash in oil prices. While excellent for the consumer, is it a detriment or a positive for the environment? Well, according to NewScientist, some are hailing it as good.
Oil prices have halved since last June, obviously leading to an increase in the amount of oil burned as fuel. This is because consumers are both less careful for things that are low cost to them, and low fuel prices encourage economic activity (Generally, transported goods get cheaper as well as their transportation costs are part of their final shelf price.) Furthermore, this discourages research into alternative energy sources. To top it all off, there doesn’t seem to be a slacking in this price slash as OPEC is reluctant to pump less. Some argue that gas-guzzlers may come back.
According to some experts, however, this is in fact a good thing environmentally. Low oil prices discourage investment into the oil market, as people want to gain money. This means that new ventures look like bad deals - as extraction is quite expensive, to tap sources yet untapped will lead to lesser gains.
Energy-wise, the boom in China is beginning to cool down as their demand for coal shrinks. China has set tight limits on future coal burning by 2020, leading to lowering coal costs around the world and mothballing on expensive coal-mining related projects.
It seems to me, personally, that on a policy-making level the slash in oil prices will in fact cause a decrease in alternative energy research and policies, as most people are most interested in their wallet. At the same time, it doesn’t seems as if it would affect pro-environmental initiatives.
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