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The foolishness of the Conservative rhetoric is difficult to overstate, and it takes many forms. For example, there’s the claim that fossil fuels are somehow exempt from the law of demand. According to this argument, higher prices for things such as gasoline won’t actually reduce GHG emissions. Instead of cutting back, people will maintain their consumption patterns, and the only effect of higher prices would be to force them to reduce spending on other things.

The obvious response would be to point to the voluminous statistical literature documenting the extent to which the quantity demanded for gasoline and other fossil fuels falls as prices increase, but you don’t even need to do that. All you need to do is remember what happened to gasoline prices after Hurricane Katrina temporarily wiped out most of the oil refining capacity in the Gulf Coast around Louisiana, reducing North American gasoline production by about 10 per cent. Although there were a few localized interruptions in supply, this sharp reduction in supply did not lead to widespread shortages. Prices rose instead, and people responded to the increase in price by driving less — just as the law of demand would predict. How much less depends on how much the price increases: the higher the price, the lower the quantity demanded.

As the Conservatives should really know by now, market-based approaches to reducing GHG emissions are more efficient than regulations. It’s better to let households and firms make their own priorities in response to price signals instead of having them imposed by the government. And the extra upside of market-based approaches like carbon taxes or cap-and-trade is that some of the costs of the policy are transformed into government revenues that can be used to compensate vulnerable groups or even to reduce other taxes.