Countries Are Pursuing the Wrong Energy Policies: Javier Blas

The oil market is desperately in need of <-bsp-bb-link state="{"bbDocId":"R914OBDWRGG3","_id":"0000017f-c021-d36c-ab7f-e46f0e040001","_type":"0000016b-944a-dc2b-ab6b-d57ba1cc0000"}">demand destruction. Governments should either be encouraging behavioral changes such as using more public transportation or allowing expensive fuel to force consumers to change.

Instead, industrialized countries are doing the opposite. Call it demand “construction.” From Germany to New Zealand, and from England to California, policymakers are either cutting taxes on gasoline and diesel or offering blanket, untargeted energy subsidies. Both will probably boost oil demand at the worst possible time.

The policies are, of course, wildly popular. But they are not only economically wasteful, they will also do geopolitical damage. Fuel tax cuts ...