Economists tell us that higher oil prices will stimulate investment in energy
alternatives. However, the prospects for a painless market-driven
transition away from fossil fuels are hardly encouraging. Globally,
trillions of dollars will have to be spent on research and on new
infrastructureÑtens or hundreds of billions per year, starting
immediately. We are not seeing anything like that level of investment now;
we have to assume that it will begin after the global oil peak (that
is, after an obvious price signal making alternatives more attractive).
But then, with less energy available to fuel the economy, we will have trouble
simply maintaining basic services. There won’t be any surplus to jumpstart
the new energy infrastructure, which will take decades to build.