Friday, September 5, 2008

The problem with subsidies

From the NYT, an article that is recommended reading in light of recent campaign promises to shore up the environment with subsidies. Apparently a practice that was hip among the green scene – putting small turbines in urban areas – is highly inefficient. In fact, it's so inefficient that "making and transporting turbines for cities may lead to more carbon dioxide emissions than the turbines save," according to some nameless "British studies." Though most people who put up small turbines on their property did it out of curiosity and not financial incentive, there are some who were likely swayed by the kinds of tax benefits and subsidies that people often receive from governments for installing supposedly energy efficient technology. The same sort of benefits that would surely be part of Obama's promise to involve the federal government heavily in technology and science, "investing $150 billion over the next ten years to catalyze private efforts to build a clean energy future." At one point, this would have included Obama's support for ethanol, which similarly turned out to be a net environmental negative.

Remember, kids: if the government is "catalyzing private efforts," they ain't private efforts no more. The free market isn't just being free to innovate: it's also being free of unfairly subsidized competition.

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