[ahepp]

I think the arguments for leaving oil in the ground have more to do with path dependence than prioritizing the needs of oil company shareholders.

Markets have a limited ability to look ahead. It's like a greedy algorithm. You're finding a local maximum, but not necessarily a global one (or even one that won't melt the planet).

The most efficient choice at any given moment (even incorporating a correctly priced carbon tax) may be to continue drilling. But due to the very long term capital investments, investing in drilling today because it's the best option, also guarantees it will be the best option tomorrow. So maybe additional interventions are required to reset the path dependence?

I think a purely market based solution would probably figure things out eventually, but we should also consider ways to help the transient response be as minimally disruptive as possible.