Local view for "http://purl.org/linkedpolitics/eu/plenary/2000-10-04-Speech-3-254"
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"en.20001004.11.3-254"2
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". – I would say to Mr Martin that there is obviously a connection between the price of any kind of fuel to the consumer and the demand for that fuel. That is the price elasticity of demand. It is a mechanism which I suppose is familiar to Mr Martin. Although the precise shape of the elasticity curve is something we may debate, the fact that it exists is certain if one looks at the oil-intensity of the economy and how that intensity has changed.
Since the oil crisis in the 70s is has approximately halved. There can be no doubt that in the longer term intensity plays an extremely important role. If, therefore, Mr Martin bears in mind that if we want to attain the aims and purposes of the Kyoto Agreement and a high price of oil to the consumer would be beneficial to that end, then he has the logic of economic reasoning behind him. The logic of economic reasoning supports the statement made by Mr Martin. One may, of course, expand on his wish – which I deduce from his words – to comply with the undertakings which we entered into in Kyoto, by saying that other forms of energy may also help us attain that aim. For example, nuclear energy is a very clear case in point. It is not part of my portfolio to deal with energy, and particularly not with nuclear energy, but since Mr Martin has embarked upon an economic line of reasoning then I feel free to make this remark.
There are other sides to this picture. If one increases the price of oil, one influences economic growth in an adverse manner. In both the Western world and for developing countries calculations have been made which show that an increase in the price of oil – USD 5 per barrel or USD 10 per barrel – means that economic growth will suffer by 0.2% or 0.5% or whatever. So it is not a simple picture. Kyoto is important. We all want to achieve that. The high price of oil is conducive to achieving that end but there is also a negative factor on economic growth with its attendant consequences in the form of more unemployment.
It is not a simple picture. I would caution Members – insofar as that may be necessary – against a one-sided approach to this whole problem."@en1
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