Luxury Good or Human Necessity?

| July 31, 2026

The neck brace did not make him stand out as much as the cigarette he smoked while in the hot tub. When our daughter attended the University of Miami, we always stayed at The Mutiny Hotel in Coconut Grove. The man with the cigarette turned out to be an Englishman who fractured his neck while on vacation in the Bahamas. His injuries required him to be flown to Miami for medical care. My discussion with him helped me to understand that in Europe, electricity is a luxury good.

Our reluctant visitor complained a lot about Coconut Grove. He asked where he and his wife could find a decent restaurant to dine in. I directed him to the numerous French, Argentine, Italian, Thai, Chinese, Brazilian, Vietnamese, Mexican, and Cuban restaurants within walking distance of the hotel. He responded by asking me where he could get "good English food." I told him that I didn't know what that was.

He said, "what is it with the excessive air conditioning everywhere?" The evident American wastefulness scandalized him. I babbled something about the necessity of air conditioning in a humid environment and that, after all, people in England heat their houses in the winter. It is only now that the lack of air conditioning in Europe is everywhere in the American press that I realize that I didn't quite understand why he felt that way.

In Europe, electricity costs three to five times what it does in Florida. My Biarritz friends ration it like water in the desert. The view from abroad that Americans overuse air conditioning reflects the European experience with electricity prices. In Ireland, the cost of electricity is 50.76 ct/kWh. In the UK, it is 36.34 ct/kWh. Everywhere in developed Europe electricity comes at luxury prices. The economic and investment implications are immense. *

Any move away from fossil fuels will require cheap and abundant electricity. Setting aside air conditioning, luxury prices for electricity are an obstacle to switching from oil and gas to electricity when heating homes. The same is true for electric cars. High prices cause consumer resistance to switching. Schemes to reimburse low-income households for their electric bills will fix nothing.

Fortunately, Europe has the money, particularly Germany. The body count will force the leadership class to accept that cheap and abundant electricity is a human necessity, not a luxury to be taxed as much as 50%. Developed countries will reluctantly open their purses and invest in power grids and home upgrades since electricity is the only humane and environmentally practical long-term option. We are already seeing this with defense, as the reality of the Russian military threat finally overcomes complacence and denial. Growth and profits seem likely to follow.

EU | EnergyPrices ·European energy price data. Free and open. https://euenergyprices.eu/en/electricity. Accessed on 07.22.2026.