This is a surprise from Newsweek. Some recent examples of green subsidy: Fisker Automotive will receive a $529 million subsidy from the US government to build hybrid cars for the US market in California. This follows a previous subsidy award of $465 million to Tesla Motors to build electric cars. Both awards were made on the recommendation of former vice-president Al Gore. Don’t get me wrong, I’m an electric car fan, I drive one myself. But such projects should succeed or fail on their own merit and without public funds in my opinion.
By Stefan Theil | NEWSWEEK
Published Oct 24, 2009
Excerpts from the magazine issue dated Nov 2, 2009
Climate change is the greatest new public-spending project in decades. Each year as much as $100 billion is spent by governments and consumers around the world on green subsidies designed to encourage wind, solar, and other -renewable-energy markets. The goals are worthy: reduce emissions, promote new sources of energy, and help create jobs in a growing industry.
Yet this epic effort of lawmaking and spending has, naturally, also created an epic scramble for subsidies and regulatory favors. Witness the 1,150 lobbying groups that spent more than $20 million to lobby the U.S. Congress as it was writing the Clean Energy bill (which would create a $60 billion annual market for emission permits by 2012). Government has often had a hand in jump–starting a new -industry—both the computer chip and the Internet got their start in American defense research. But it’s hard to think of any non-military industry that has been so completely and utterly driven by regulation and subsidies from the start.
It’s a genetic defect that not only guarantees great waste, but opens the door to manipulation and often demonstrably contravenes the objectives that climate policy is supposed to achieve. Thanks to effective lobbying by American and European farmers, the more cost–efficient and environmentally effective Brazilian sugar-cane ethanol is locked out of U.S. and EU markets. Even within Europe, most countries have their own “technical standard” for biofuels to better keep out competing products—even if they are cheaper or produce a greater cut in emissions. Because the subsidies are tied to feedstocks, there is zero incentive to develop better technology.
Both the International Energy Agency and the Organization for Economic Cooperation and Development have asked Germany to end its ludicrous solar subsidies that will total $115.5 billion by 2013.
Read the article The Dark Side of Green at newsweek.com