Sunday, December 28, 2008

Energy Independence

Can developing alternative fuels relieve tensions with Iran?
Say the US developes a substitute for oil that is clean, efficient, and cheap? Now Iran will have to rely on its own natural resources to survive. Comparative advantage tells us that a country cannot provide the same standard of living by producing all of the goods and services itself. A country that trades will have more benefits. So in the absence of petrol trade with Iran, they will immizerize like North Korea. My point is esoteric. The flow of dollars into Iran would almost stop and therefore halt nuclear development.
I believe that the Iranians are people just like us, and they do not want a war. But the unintended consequences of alternative fuel might be stopping the proliferation of nuclear bombs.

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