Hello there! I mentioned in my last post that I occasionally read my old papers. I also read my old (and not-so-old) class notes from time to time, partially to study and partially to see if I can even understand what I wrote down. Sometimes concepts seem so concrete when your professor explains them and then only a few short days later they elude you, and your haphazardly jotted notes provide no solace. So it’s important to write more than you think you should, just in case your brain does what mine tends to do – bury that interesting bit of information deep down, to be resurrected at inopportune times, namely to bore the person you’re sharing a coffee or beer with, instead of when you need it, for instance on exam day!
So ANYWAY I wanted to share this little tidbit that I came across today from my Energy Economics class last week. I thought it was such a nice, concise way to visualize an integral concept to technological development.
Yes, I see now that to someone who is not me this doesn’t seem very revolutionary, and might not make any sense at all. Essentially, this is the way in which price drives innovation. We’d all love to believe that inspiration strikes all of us at random times, that technology is at the fingertips of wizards in their fields and forms a nebulous forcefield around those individuals, impenetrable by the layman. Technological advancement just happens! This isn’t necessarily the case, however. Changes and improvements to our lives come about out of necessity, and the most important driver of necessity is price.
Fossil fuels have always polluted the environment and we’ve always known about the detrimental effects, but they’ve dominated the market as the cheapest source of fuel and so for a long time it’s been unnecessary to provide substitutes or alternatives. However, once gas prices rise (the p ^), innovation in, for instance, renewable resources, becomes more palatable, because they may well end up less expensive (price down) as supply of the new resource rises to meet demand. The next time a technological advancement is needed won’t be until the price of current technology rises for the myriad reasons that prices do rise. So high prices lead to new discoveries and innovations, leading to lower prices, and lower demand for new innovation. Cue the Lion King soundtrack! Now we’ll both remember this for our exam..