The long term macroeconomic role for energy

Arguments about the role of energy in economic systems are incomplete without analysis of the effects of changes in the price of energy. It may be true (because energy can substitute for so many other things) that we can continue to increase energy output per capita as long as we are prepared to increase energy consumption per unit of output, but if the price of energy is higher than consumers are prepared to pay the process will come to a stop. It follows that the output at any point in time is the result of an equilibrium between a great many factors in the economy one of which is the price of energy. The question that I now pose is whether the price of energy is an especially important factor. The subject is analyzed under the headings: the economics of energy price; a first attempt to model long-term effects; what is a price hike; modelling energy price hikes; implications and lessons for nuclear energy; the present reality. (author)