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Comment by ghastmaster | Hacker News Reader

>If there is no incentive or motivating market stimulus

Is the depletion of oil and gas reserves not enough incentive? They will not last forever. In the grand scheme of things it is a small amount of time before we have to convert to nuclear, solar, hydro, and wind or start burning trees en masse again. As the resources are depleted, the price will go up due to limited supply. That price increase will spur R&D.

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> Is the depletion of oil and gas reserves not enough incentive?

No, because the problems that face a commons do not create an incentive for the individual. You need to learn this concept:

https://en.wikipedia.org/wiki/Tragedy_of_the_commons

Tragedy of the commons is precisely what I have used to argue that prices will go up because the resources are being depleted. In this case, oil/gas is being over harvested by the individual. However, other energy sources are relatively infinite. Oil/gas happens to be cheap right now, but in the future it will not be. As the price rises, there becomes a greater incentive to seek other sources.

> As the price rises, there becomes a greater incentive to seek other sources.

This is not a valid or reliable mechanism for correcting misaligned incentives. It may occur by happenstance but is not guaranteed to happen prior to significant damage to the commons. The point of a carbon tax is to create a direct mechanism that corrects incentives in the presence of market failure. I would suggest this article:

https://en.wikipedia.org/wiki/Externality

Absolutely not. We've got at least 50 years before that's an issue. 200 quarterly reports.

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