I agree that renewable subsidies should be decreased as their cost is getting down. Roof-top solar can already almost do well without subsidies, because household battery storage and EV technology is evolving rapidly and retail price of consumer electricity is high.
Wind needs some support, because offshore wind is still expensive. External costs for offshore wind are so low that it must be pursued at large scale although it might not be competitive with coal power. Also wind at free electricity markets is problematic, because electricity spot price is at lowest when there is high winds and highest when there is no wind. This equation makes offshore wind impossible investment without properly sized FIT. Problem with carbon tax is that it will cause problems for industry. Especially coal intensive steel industry is suffering from carbon tax. It is better to make tax payers pay, because industry needs cheap electricity most. Therefore positive clean energy subsidies are always better than negative carbon tax incentives. And I would include also natural gas as clean energy. Energy subsidies are effectively money transfers from service sector to energy intensive industry. This should be good thing because in modern economy service and finance sectors tend to be too big in relation to manufacturing sector. Only manufacturing is producing real economic growth where as service and finance sectors are only redistributing existing money, therefore energy subsidies are the best way to make economy more healthy and growth oriented. I think that this is the real reason behind why western world is in economic troubles. There is just too much money at service and finance sectors compared to manufacturing sector that is producing real wealth. —Jouni On Mar 16, 2013, at 5:20 PM, Jed Rothwell <jedrothw...@gmail.com> wrote: > It seems to me they could fix this by tweaking the tax rates. Lower the > subsidies for wind and solar a little. Increase the carbon tax. The net > expense to the taxpayers is zero but natural gas comes out better than coal > and little closer to wind and solar. > > - Jed >
