Government subsidies are keeping alive the wind, solar, biomass and geothermal energy industries, but such government subsidies are based on erroneous economic projections, according to analysts. Despite polls offering strong public support for government-funded renewable energy, very few consumers will opt for it due to the high cost. Here’s why:
Without preferential policies, the renewable energy industry (at least the portion that generates electricity for the power grid) would cease to exist. And while there is great support for renewable energies, less than 1.5 percent of consumers in any state have signed up for such programmes. Clearly, there is a difference between what people tell pollsters about their willingness to pay for environmental quality and their actual preparedness to pay in the marketplace, observers say.
Source: Jerry Taylor and Peter VanDoren, Evaluating the case for renewable energy: Is Government Support Warranted? Policy Analysis No. 422, January 10, 2002, Cato Institute, January 2002.
For text http://www.cato.org/pubs/pas/pa422.pdf
For more on Renewable Energy http://www.ncpa.org/iss/ene/
FMF Policy Bulletin\17 September 2002
