The Economics of an Energy Crisis

Fernando  Y. Roxas,

The Economics of an Energy Crisis

Abstract:

Perhaps there is no aspect as pervasive inour day to day life as the impact of energyutilization. Together with the evolution oftechnology, man's ability to harness energyhas enabled him to control and shape the

environment. With the flick of a finger, he canalter the perception of night and day. Withinhours, he can travel great distances withspeeds unimaginable with any animal motivepower. With relative ease, he can duplicatethe heat in the earth's core to fire the wheelsof industry.It is likewise through this familiarity that

we all have taken energy utilization forgranted. The economics, meaning the efficientallocation, of energy receive scant attentionfrom economists save in situations whentraditional sources are disrupted by externalitiesor in common language – energycrisis. The gathering of data, exhaustiveanalysis and lessons learned are quickly forgotten;they are filed away in some dusty nookof libraries. Articles dealing with the

economics of an energy crisis are limited andsparse. In fact, we only realize how crucialenergy is in times of scarcity. In 1973 and 1979,oil was embargoed. Today, war threatens theMiddle East where three quarters of theworld's supply is kept.