Think back to your high school economics class. Remember that supply-demand chart? And remember that question about what happens when there’s an inelastic demand, but the supply goes down? Answer: prices go up.
This is the unfortunate truth so often ignored by the “Keep It in the Ground” crowd. They’d like you to believe that “keeping it in the ground” would result in a cleaner world. This is, at best, stunning economic illiteracy. And at worst, these activists are deliberately misleading the public in order to achieve their extremist political goals.
Because the truth is that fossil fuels don’t just create the car, bus, jet, and truck fuels that drive our modern transportation system for people and goods. They also are the building blocks for everything from IVs to cell phones to seat belts. Everything plastic comes from petrochemicals, as do medicines, clothes, insulation, packaging, and tires (to name but a few of the literally millions of items that can only be derived from fossil fuels).
So our demand for fossil fuels is pretty darn inelastic. We need to move goods and people. We need to create and buy medicines, clothes, home goods, and safety gear.
And what happens if the “Keep It in the Ground” activists succeed in limiting the supply? Prices will go up. Consumers—especially low-income families with less disposable income—will pay the price for the activists’ actions. And consumption of fuel and the countless essential goods that are derived from oil will continue unabated, because our lives literally depend on it. So the environmental gains that are the ostensible goal will not be achieved.