Oil - Reasons to Pump Even More - Climate Change (project syndicate)

in the long term, the fact that fossil fuels are major contributors to the rise in atmospheric carbon dioxide and thus climate change is likely to prompt policymakers – and investors – to take serious action. This leads to what the German economist Hans-Werner Sinn has called “The Green Paradox.” The possibility that the use of fossil fuels will one day be restricted creates a powerful incentive for oil producers to sell as much as they can before the limitations take effect.... And yet, the forecast is far from rosy. History is replete with examples of technological advances interacting with resource availability, with enormous geopolitical impact. Britain’s oak forests allowed it to become the world’s premier naval power during the Age of Sail, when a good timber supply was the key to control of the seas. The Industrial Revolution turned steel and coal into strategic goods, and struggles over oil dominated much of the twentieth century, including during World War I, when the loss of Romanian petroleum contributed to the German collapse on the Western Front in 1918. ... epochal consequences, as weakening oil prices undermine the authoritarian regimes that control the main producers. There is a large amount of scholarly evidence linking dependence on natural resources with poor governance – the “resource curse.” Whatever the many differences among Nigeria, Venezuela, Saudi Arabia, Russia, Iran, and Iraq, all have one thing in common: Oil revenues have corrupted the political system, turning it into a deadly struggle for the spoils. As prices fall, the bandits in charge will quarrel more among themselves – and with their neighbors… German Finance Minister Wolfgang Schäuble’s recent proposal to pay for accommodation for refugees with a European petrol tax makes perfect sense…. …The blowback from ever-cheaper oil is a problem that no country is likely to be able to deal with on its own. Read more at https://www.project-syndicate.org/commentary/low-oil-prices-political-instability-by-harold-james-2016-02#Rrrxfgsuk1OpeDlh.99