Yesterday, the President addressed the United Nations’ Climate Change Summit in New York City, highlighting several major policy initiatives aimed at reducing greenhouse gas emissions. I commend the President particularly on his plan to phase out fossil fuel subsidies (and to encourage G-20 nations to do the same.) Subsidies distort the market, encouraging investment in unprofitable sectors that might be better spent elsewhere.
So why stop there? Let’s get rid of ALL the subsidies in the energy market. Really.
As the President acknowledges in his speech:
We are making our government’s largest ever investment in renewable energy — an investment aimed at doubling the generating capacity from wind and other renewable resources in three years. Across America, entrepreneurs are constructing wind turbines and solar panels and batteries for hybrid cars with the help of loan guarantees and tax credits — projects that are creating new jobs and new industries. We’re investing billions to cut energy waste in our homes, our buildings, and appliances — helping American families save money on energy bills in the process.
How about scrapping the subsidies to renewable energy, too? Cut the funding to wind energy. And solar energy. And nuclear energy. If the ideas are worthwhile, and the technology is good, private investors will line up to fund these ventures. When the government underwrites research in certain industries, it has that much more incentive to offer those industries concessions and special treatment in the future (Fannie and Freddie, looking at you.) How’s a business to compete against Uncle Sam’s largesse?
Oh, and one more thing – drop the dollars for dishwashers program. Seriously.