Will we ever stop using fossil fuels? (Covert et al.)
This paper by Thomas Covert, Michael Greenstone and Christopher Knittel published in the Journal of Economic Perspectives suggests that technology-driven cost reductions in fossil fuels will lead us to continue using oil, gas, and coal unless governments pass new taxes on carbon emissions. It argues that the relative price advantage of fossil fuels over low-carbon energy sources has not declined substantially over time and that without robust efforts to correct the market failures around greenhouse gases, relying on supply and/or demand forces to limit greenhouse gas emissions is relying heavily on hope. The paper is available to download on the MIT website.