Saturday, May 22, 2010

You Can’t Build a Growth Company on Public Subsidies

Coyote Blog on Green Rent Seeking:
Do the math. You can’t build a growth company on public subsidies. It may be possible to grow at first when the subsidized activity (e.g. solar) is a tiny percentage of the market. But once it starts to grow, the projected subsidies are astronomical. The German solar subsidy is something like 50 cents per KwH — to give one a sense of scale, the typical electricity price from fossil fuels there or here is something like 8-10 cents per KwH. Subsidizing just 20% of US electricity production at this kind of rate would cost $50 billion a year. Subsidizing all production would cost a quarter of a trillion dollars a year.

No comments: