Its like cutting off the oxygen in the scuba-gear factory to motivate the engineers to invent something more efficient.

Good analogy. Innovation won’t happen just because it’s forced. I like the idea of tax breaks. If people understand that this can effect their bottom line, they’ll be more inclined to conserve.

France has huge energy taxes and price controls for environmental and conservation purposes (to the point of economic stagnation)…where is the solar-powered Pugeot?

Research grants and tax breaks for consumers who use alternative energy is a better method. You provide incentives for investment while keeping the economy humming along.