For the past decade, the idea of Global Warming and human consumption has been on the forefront of debate, legislation, and production ledgers of many companies.  While I am not here to debate the legitimacy of global warming; I do however want to speak about the fallacies of the environmentalist movement.

The biggest problem I have with the Environmentalist movement is that it targets the wrong antagonist.  The crux of the argument is that: humans consume too much, and it is the human tendency to consume as much as they can until the resource is depleted.  This argument sounds appealing to the masses; but to those of us who understand Economics, the argument has quite a few holes in it.

Without going on a long tirade of numbers and statistics, I’ll make my argument clear and concise.  The reason the environmentalist standpoint is flawed is because it does not take into the simple effects of supply and demand.  According to their argument, humans keep consuming until we deplete a resource; incomplete.  The truth is that we humans will continue to consume, however, if the supply of such a resource is becoming scarce, the market adjusts and the price of that good increases.  When the price increases, demand levels off because that good will have become too expensive for everyone to buy.  When this happens, consumers look to cheaper alternatives and substitutes; while consumers buy these substitutes, suppliers of the original resource have time to replenish their stocks and increase supply, and so the cycle continues.

The idea that we will use all the worlds’ oil in 15 years or so is ridiculous, there will always be substitutes both naturally and synthetically.  The entire argument has to be looked at in a different perspective.