David wrote:
>  The UK tax on power/gas is 5% VAT, down from the previous
> 17.5% - one of the first moves of the 1997 government,
>  and not very clever if we're to be more energy-efficient.

This is a very popular economic misconception. High prices serve two
purposes: limit the use of a resource and, the one that everyone tends to
forget, cultivate the interest of other suppliers to get into the market
and/or use the profits from the higher prices to develop more of the
resource or an alternative to the resource.

This is the downside with trying to tax a solution into existence. Yes,
higher prices will reduce consumption, but more so in the lower income
brackets making it a rather regressive solution - if that is an important
characteristic for a solution. But the taxation solution does not promote
others to get into the market because new investors don't see any of that
artificial profit. Also, the money that could be used to develop
alternatives is put in the hands of those who may or may not use it wisely.
(I leave it as an exercise to the reader to determine if Federal Governments
around the World handle the people's money well...)

BTW, what is called petrol in the UK and Canada, we call gasoline or gas for
short. What the UK/Canada call gas, we call "natural gas". (There is also
Propane or in its liquid state, LP Gas.)

Mark W.

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