Stephen Lacey

What free market?

Reporter, Climate Progress, Sep 27, 11.

The political reaction to the Solyndra scandal has been laughably devoid of both short-term and long-term historical perspective. In an attempt to exploit a political opportunity, many House Republicans are railing against government investments in the renewable energy sector. However, those same politicians requested millions of dollars for cleantech projects in their own states just a year or two before.

This bad case of amnesia stretches far beyond the last two years. Apparently, many in Congress have forgotten about the last 100 years of government investments in oil, gas and nuclear — all of which have far outpaced investments in renewable energy like solar PV, solar thermal, geothermal and wind.

A new study with terrific charts, “What Would Jefferson Do? The Historical Role of Federal Subsidies inShaping America’s ERnergy Future,” released by the venture capital firm DBL Investors, attempts to quantify and contrast those government investments. The researchers looked at the vast array of federal incentives — tax credits, land grants, tariffs, R&D, and direct investments — and found that renewables have received far less support than any other sector.

As a percentage of inflation-adjusted federal spending, nuclear subsidies accounted for more than 1% of the federal budget over their first 15 years, and oil and gas subsidies made up half a percent of the total budget, while renewables have constituted only about a tenth of a percent.
The researchers are somewhat selective about which subsidies they factor in. In order to come to directly-comparable figures, they outline four criteria for evaluating subsidies: The subsidy is designed to increase production of the targeted resource; all the data for the subsidy is available; the subsidy existed during the early stages of of domestic production; the inclusion of the subsidy allows for meaningful comparison across different sectors.

When adding them all up over time, the report’s authors found that on an average yearly basis, renewables represent a small fraction of the total government investments in the energy sector.

Full Story: What Free Market? Subsidies Have Always Been a Big Part of Energy Industry, New Report Shows
Source: Climate Progress Blog, September 26, 2011

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