PER 2015
opinions groups have about this subject. Perhaps by the end of this essay you may have a clearer view on this subject. First I shall take you through the positives fracking can bring to the UK. ‘The Committee on Climate Change, the government’s official advisers, said shale gas (which is cleaner than coal) can help slow global warming.’ 44 As we can see from this quotation, it is thought that shale gas obtained through fracking can help slow global warming. This is because shale gas obtained within the UK can help cut down the UKs expenditure on imports of energy and be a slightly cleaner alternative to coal in the meantime whilst cleaner energy sources such as renewables are put into use. Therefore, global warming can be slowed down using fracking. The economic side to this argument is that this reduction in reliance on other countries for energy means the AD of the UK will increase, which means GDP increases. This is due to the equation AD= C + I + G + (X-M), where we can see the decrease in M means AD increases. Also, the use of cleaner energy sources such as shale gas means there are fewer negative externalities. This means the social cost is lower than that of coal for example. The diagram below shows how social costs are higher for coal and therefore there is a higher welfare cost: f f f f f f f f f f f f f f f ff f f f f f f f f f f f f f f f f f f f f f f f
This diagram clearly shows how shale gas can be used to harness energy as non- renewables are not yet used enough to supply the UK with clean energy. The social cost is reduced through using fracking to harness energy, which then causes a smaller
MSC
welfare cost shown by the reduction in negative externalities in production and therefore the size of the triangle formed in the diagram. As we can see, the shift in still does not bring the MSC to the social optimum, however, but it is still more socially optimum than the MSC using coal brings about. Therefore, this is more evidence that using fracking helps society for the better as a bridge between the transition from non-renewables to renewables. Fracking is already in full swing in the USA, where it has been used since 1949. Since November 2012, fracking there has helped gas prices to plunge significantly to ‘ 29% of natural gas prices in Europe, and to one-fifth of natural gas prices in Japan.’ 45 fe fe f e fe f e fe f ef e f ef e f ef ef ef
44 http://www.economist.com/news/britain/21641287-fracking-shale-gas-draws-closerat-snails-pace-drill- seekers 45 https://en.wikipedia.org/wiki/Hydraulic_fracturing_in_the_United_States#Gas_price
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