[rayiner]

I’m not making a normative point about what we should do. I’m describing what’s happening. Econ 101 also tells us that failing to internalize an externality will result in more than an efficient amount of that thing being used, because it’s artificially cheap. So if I were to comment on it, I would support internalizing that cost up front.

Rhetoric about “but profits!” is good for creating narratives and selling newspapers. But it’s not good at actually helping fix the problem. The oil & gas industry has a 5.6% profit margin. Profit is not a relevant discussion when it comes to the oil and gas industry.

Also, insofar as there aren’t good alternatives to oil, oil companies might make even more money if you force them to pay the cost of capping wells ip front. That increases their up-front investment which means they’ll demand a higher return on the backend. The problem is that presidential approval ratings closely track gas prices at the pump, and politicians won’t do anything that will cause gas prices to go up.

This is entirely a decision for consumers to make. Do we want to pay more at the pump know, or pay more in the cost of capping wells 20 years from now?