sure it is. removing subsidies on commodities like gas doesn’t change the demand for gas, it just puts more of a burden on poor people, and doesn’t matter at all to the rich who use it most. that path will only lead to backlash against green policies in general, see the yellow vest protests. in order to reduce consumption you actually need to reduce demand by giving people sustainable alternatives.
Demand elasticity is a thing. Demand won’t shrink by the same ratio prices rose after removing subsidies, but it will shrink.
Response to that I can’t predict, but there are places in the planet where prices are lower because of the general poverty of population and the need to still sell it, and places where prices are even higher, but most of the population can’t afford fuel, I can’t name.
EDIT: This was incomprehensible, sorry. I meant that in the long term prices for the consumer are going to become closer to what they were with subsidies, likely, thus the real prices - lower. The question is how bad it gets before that happens.
sure it is. removing subsidies on commodities like gas doesn’t change the demand for gas, it just puts more of a burden on poor people, and doesn’t matter at all to the rich who use it most. that path will only lead to backlash against green policies in general, see the yellow vest protests. in order to reduce consumption you actually need to reduce demand by giving people sustainable alternatives.
Demand elasticity is a thing. Demand won’t shrink by the same ratio prices rose after removing subsidies, but it will shrink.
Response to that I can’t predict, but there are places in the planet where prices are lower because of the general poverty of population and the need to still sell it, and places where prices are even higher, but most of the population can’t afford fuel, I can’t name.
EDIT: This was incomprehensible, sorry. I meant that in the long term prices for the consumer are going to become closer to what they were with subsidies, likely, thus the real prices - lower. The question is how bad it gets before that happens.