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Current legislation already stipulates that in October that so-called "conforming limit" will fall from $729,750 to $625,500 for high cost regions.
If we can't look to them to increase capacity then we're looking at much more high cost regions, and the difficult geologies like tar sands, shale and deep water.
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The difference in spending is almost entirely due to the way medicine is practiced in high-cost regions.
Many high-cost regions are just a few hours' drive from a lower-cost, higher-quality region.
Last year, Mr. Navarri announced aggressive plans to cut costs by shifting manufacturing out of high-cost regions like North America and Western Europe and into Asia and Eastern Europe.
The 19-member panel said such an index would be unfair because it would "reward inefficient providers in low-cost regions and punish more efficient providers in high-cost regions".
His analysis shows that after a short period of lost revenues, the Gulf states would enjoy years of strong cash inflow, as they take market share from high-cost regions.
The absence of such a provision is not a result of special-interest lobbying but rather lawmakers' basic instincts to protect their home turf: high-cost regions fear being punished by steep cuts, and low-cost regions want flexibility to let their costs rise, if necessary, and not face restrictions tied to their historic efficiency.
The perverse result is that high-cost regions (such as the North Sea) have been exploited before low-cost ones (such as Iran).The oil industry is like a ship with its centre of gravity above the water line, says Jeremy Elden of Germany's Commerzbank.
There is no adjustment in the reimbursement for geographical variations in case-costs – an obvious disadvantage for high-cost regions.
Trade lowers the marginal value of carbon in high-cost regions and raises it in low-cost regions.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com