15
Nov
2011
The Battle Rages on at The Economist
Rob Bradley asked me to make you folks aware that he is currently running neck and neck at The Economist in a debate over government subsidies to renewable energy sources. I link, you decide.
If an industry cannot survive by offering its goods, products or services to a willing and able public then it ought not exist. When the government intervenes in favor of that failed industry it creates a false economy. That is what it did when it intervened in the housing industry by forcing lenders to give loans to people who knew they could not pay it back.
This is yet another example supporting the seperation of Government and Economy.
Subsidies and are a failed strategy when it comes to creating wealth and economic growth. But that is not the question. I am sure some environmentalists would even agree that green energy subsidies subtract from economic growth.
The purpose is to reduce CO2 emissions and ,on that account, subsidies bear in fact some potential for success.
Internet libertarians, UNITE! Form Voltron! Upvote to infinity and beyond!
LOL
I think the only sensible way to consider renewables at this stage is as a research project. There are some genuine applications for solar cells in very remote areas where transport is difficult, but in terms of mainstream electricity users it is far cheaper to build a coal fired power plant, and build it near the coal mine (because electricity is easier to transport than coal).
So the real question is, how to effectively stimulate research into [A] cheaper solar cells, and [B] more efficient solar cells and [C] energy storage systems.
Government has had some success in stimulating research, mostly by direct funding of research projects, but I would argue that they are not efficient. Government can mobilize larger volumes of funding (e.g. 7.5 billion euros for a Large Hadron Collider that is highly unlikely to ever deliver anything remotely resembling a commercial product). However, private enterprise generally has a better idea of genuine demand and targets research more appropriately.
Private enterprise is generally better at “incremental step” research, such as the development of the microcomputer (which is still the same basic design as 30 years ago, just bigger and faster). Government has done well at the “big leap” research, like building the first atom bomb.
Wow! It’s a split vote thus far. Yes, I do think that we to wander on down yonder and see what’s what. Thanks for relaying the message, Bob.