AdamB wrote:Not an uncommon opinion. How about some data analytics to back it up? Something basic and easy...what assumptions do you use for demand elasticity to price?
As a layman US consumer:
Well, when talking about gasoline, it should be rather obvious. Historically, in the first world anyway, demand is quite inelastic unless pricing gets "extreme".
This is of course, despite the endless false CLAIMS of the doomer patrol that a moderately higher price means certain economic doom, which has NEVER been CLOSE to the truth. As was most recently clearly demonstrated globally and in the US from mid 2010 - mid 2014 with average WTI pricing near $100 a BBL.
When gas prices passed $4 on average in the US in the summer of 2008, for the FIRST time since the early 80's, I noticed concrete evidence from ordinary people that the vehicles they were buying and the driving they were doing -- that gasoline prices was a serious factor in the decision making.
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Now, depending on how deeply EV's (including HEV's) penetrate the first world light vehicle market in the coming years, that inelasticity of demand could well diminish. After all, if I (or any Joe 6-pack) buy, say, a Toyota HEV for only roughly a few $thousand more than the ICE model, and roughly DOUBLE my city mileage -- then if I drive a lot of city miles, it's a no-brainer if gas prices rise significantly and stay up for awhile.
Or at some point, that might even nudge me toward a BEV, depending on the trade-offs re net pricing (including tax incentives), range, convenience, etc.
For the rest of the major energy sources, for the typical consumer, I'll say somewhat similar, at least until green energy alternatives get really compelling re price and convenience.
Example -- new furnaces are expensive. It would take something SERIOUS to get me to want to convert from my efficient NG furnace. And it would take SERIOUSLY low prices to make me want to go solar roof and lots of battery backup, when my Generac whole house generator does the job reliably, at low cost, and can run just fine for WEEKS (unlike even a lot of batteries at very high cost) if a serious longer term power outage ensues. No matter what the outage, I only see a 30ish second outage until the generator turns itself on, and the occasional brief sag (which doesn't impair anything) when a new power load is added.
Oh, and the house I live in had a neighborhood outage for a good two weeks from a major (for our area) ice storm in 2003. And for several days a few times since then from ice storms and wind storms, so it's not like meaningful power outages are highly improbable, at least where I live.
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Now, as far as commercial demand, I can't say. My experience from work is that WHEN they wanted to replace serious equipment, they would look at various cost alternatives, at the time, and then live with the decision.
Given the track record of the perma-doomer blogs, I wouldn't bet a fast crash doomer's money on their predictions.
