If by “innovation” in response to higher gas prices, we mean switching to smaller cars and taking the bus and riding bicycles more often, then I agree entirely that higher gas prices in the U.S. will induce innovation.
Avent dissects this response. Jim sharpens his point in the comments:
I was trying to question the often-asserted belief that raising the price of carbon any politically conceivable amount would induce the creation of enough new technology to materially address climate change for decades. While I wouldn’t state it as strongly as you do when you say that “No cost can induce the kind of vision that leads to new ways to solve problems”, I laid out a couple of reasons why I believe a rational observer ought to be very skeptical that adding $5 to a gallon of gas in the U.S. would do it in this case.