Oil Prices & Energy Efficiency

What should we do?

Countries must resist the temptation to limit the price of gas. And countries such as China, which already caps gasoline prices, should relax those controls and let prices rise. This will encourage conservation and spur the search for alternatives.

Energy efficiency is only part of the reason we're better off than in the 1970s. Our economies are more knowledge-based than industrial-based. The service sector has taken over from manufacturing as the primary economic driver.

As a result, the consumption of oil - and energy in general - is less of a burden on the economy. In the United States, for example, oil consumption sucks up 5.75 per cent of GDP, compared with 7.5 per cent in 1980.