> For example, if you could invent a gas engine that got 120 miles per gallon, it likely wouldn't take much more physical materials to produce, and it would decrease demand for gas.
This is not true in general. Much higher gas efficiency lowers the amount of gas that existing uses need. (Sending one cruise ship to the Azores takes less gas!) That reduced requirement means reduced demand. But it also raises the value of gas. (One gallon of gas does much more work than it used to!) That increased value means increased demand. Maybe we should start sending more cruise ships to the Azores!
This is not true in general. Much higher gas efficiency lowers the amount of gas that existing uses need. (Sending one cruise ship to the Azores takes less gas!) That reduced requirement means reduced demand. But it also raises the value of gas. (One gallon of gas does much more work than it used to!) That increased value means increased demand. Maybe we should start sending more cruise ships to the Azores!