Paul Krugman writes:
The Oil Drum has this nice picture from the Sydney Morning Herald about the percentage of income Sydney area residents will spend on gas — er, petrol — if the price rises substantially. The outer suburbs are, not surprisingly, hard hit.
Maps for US metro areas would presumably look similar.
This is really our big problem: we’ve made long-lasting investments — in infrastructure, in housing, and to some extent in our auto fleet — based on low oil prices. Those past decisions are what make today’s high prices such a big problem. In the long run we can adjust, but in the long run …
Which reminds me that all the way back in October 2006, I wrote:
If we indeed must rethink our addictions, automobile is only one of them, and far from the most important. In an economy where transportation is expensive because of high fuel cost, people must live closer to work. Thus, one of the most important addictions to rethink is the addiction to a single-family home in suburbs; with high fuel costs, the ‘burbs are viable only for retirees who don’t have to go to work every morning. The working population will have to shift back into the cities and live in high-rise apartment buildings or condominiums.
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