Where are the clean energy subsidies going?
They’re going away, it seems. From the New York Times:
If nothing changes, clean energy funding will drop from a peak of $44.3 billion in 2009 to $16 billion this year and $11 billion in 2014 — a 75 percent decline.
But were they really effective in the first place? A stark article in Foreign Affairs:
The root cause of today’s troubles is a boom-and-bust cycle of policies that have encouraged investors to flock to clean-energy projects that are quick and easy to build rather than invest in more innovative technologies that could stand a better chance of competing with conventional energy sources over the long haul. Indeed, nearly seven-eighths of all clean-energy investment worldwide now goes to deploying existing technologies, most of which are not competitive without the help of government subsidies. Only a tiny share of the investment focuses on innovation.
It’s undeniable, some of these subsidies have been rather wasteful. Particularly for biofuel, a doomed industry that does little but cause massive food price volatility.
We should increase these subsidies, but watch for the devil in the details. Energy subsidies should work to spur long-term innovation, not achieve short-term political gain.
