78 such prizes in the transport sector could take the

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Unformatted text preview: avel; no gas for cooking and heating.’29 Most technological transitions, like the use of personal computers, are rapidly adopted because they provide immense advantages to individuals and firms; however , it is difficult to envision a self-reinforcing transition away from oil. Sober-minded proponents of alternative fuels like Amory Lovins remind us that: Transitions can be swift when market logic is strong, policies are consistent, and institutions are flexible. It took the us only 12 years to go from 10 percent to 90 percent adoption (in the capital stock, not new sales) in switching from horses to cars, from uncontrolled automotive emissions to catalytic converters, and from steam to diesel/ electric locomotive.30 292 Oil DDW 2012 1 Prizes CP 293 Last printed 9/4/2009 7:00:00 PM Oil DDW 2012 1 Prizes CP Bromley, Senior Lecturer in International Political Economy at the Open University, UK, et al., 06 Simon Bromley, Senior Lecturer in International Political Economy at the Open University, UK, et al., · Joshua Busby Nils Duquet · Leben Nelson Moro, 5-06, [“Climate Change and Collective Action: Troubles in the Transition to a Post-Oil Economy,” St Antony’s International Review The International Politics of Oil, http://www.utexas.edu/lbj/faculty/busby/wpcontent/uploads/busby_stair_2_1.pdf] E. Liu Unfortunately, the us government’s record on supporting alternative energy sources and new vehicles–from synthetic fuels to ethanol to zero emission vehicles–has not been especially good. The dilemma of how to support technological development without ‘picking winners’ remains. On one level, innovation will be spurred if there is a price on carbon. Economists have grudgingly accepted political realities and moved from supporting the most efficient system–carbon taxes–to second best options such as a cap-and-trade system that limits greenhouse gases but allows firm to trade emissions permits. The eu’s emissions trading system is an example. Senators John McCain and Joe Lieberman have been presenting similar proposals for the us for several years. The political difficulty of initiating such a program in the us has led economist Billy Pizer to endorse a cap-and-trade system that includes a safety valve (to provide more emissions permits if prices rise too substantially) that is based on greenhouse gas intensity targets (rather than an outright cap on total emissions).77 Even if enacted, the market signal for such a system is likely to be weak in the absence of complementary action. One way for governments to spur innovation is to offer prizes to companies that are able to meet ambitious technology standards. This has been used before, most famously in the 1700s for the device that could determine longitude at sea. More recently, the Gates Foundation has offered us$450 million in prize money to support the development of new vaccines for diseases and improvements in tropical crop varietals.78 Such prizes in the transport sector could take the form of monetary awards or procurement contracts. The prize would need to be attractive enough to induce...
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This note was uploaded on 01/30/2013 for the course ECON 101 taught by Professor Burke during the Spring '13 term at Southern Arkansas University.

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