<I think you're exactly correct. Plastics came along as elephant ivory for billiard balls became rarer and rarer, and so on.

True. When whale oil got hard to come by, they started digging for petroleum.

It really doesn't matter if those $4 are taxes.

Actually, it does. If the $4 goes to the private sector, it gets invested in new profitable ventures. If it goes into the Treasury, it ends up being flushed down the usual politically-motivated ratholes. In the long run, the former is better for the economy, although you are correct that the price pressue on the consumer would be almost indistinguishable.

On the other hand, obvious substitutes for many applications, such as nuclear plants, won't become attractive until folks are given the choice of having their power off between 10 PM and 5 AM, having their energy prices triple or looking at nuclear power plants.



Then they may get rational about it.



They won't get any more rational than consumers ever get, but they will start paying for alternatives. The free market always works. The key is to avoid general subsidies or price controls that prevent the price pressures from reaching consumers. This was one of the big mistakes in California.

And in the rest of the world the price of gas doesn't seem to have forced a major switch to alternatives.

Remember, it is possible to drive across all of Europe in about a day. I think the pressure would be a lot higher on American drivers. And you may be wrong about them switching to alternatives. Europe has a very comprehensive rail system. I have no proof of this, but it's possible that high gas prices may have had something to do with this.