Do energy subsidies actually work?
Governement subsidies are largely social experiments without any guarantee of success. Some pay off royally, while others are a waste of time and money.
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Ironically, the latest arguments that have been cobbled together by anti-nuclear activists (not a synonym for environmentalist–whatever that is) about the capital intensive nature of new nuclear power plants would have been applicable to these dam projects as well. And there were safety concerns:Skip to next paragraph
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“The Colorado River Board found the project feasible, but warned that should the dam fail, every downstream Colorado River community would be destroyed, and that the river might change course and empty into the Salton Sea.”
The real poster child for government subsidies that have paid off royally would have to be nuclear power plants, which provide three times more low-emission electricity than hydro does–without destroying river and desert ecosystems.
Capitalizing on Tax Credits
I have a long and sordid history of capitalizing on tax credits. We received a $3,000 credit when we bought our Prius back in 2006, even though we would have bought it anyway. In hindsight, because the commercial success of the Prius has little if anything to do with that tax credit, I would chalk that subsidy up as an example of one that did not pay off, or to be more exact, a subsidy that did nothing but move money from the public larder into the pockets of lucky citizens in the market for a hybrid at the time, oh, and also into the pockets of dealerships who didn’t have to dicker about price. Before the tax credit, supply was just barely keeping up with demand. After the credit, we all had to put $1,000 down and wait several months for one to arrive.
A few years ago I capitalized on a $1,800 tax credit to upgrade my twenty-year-old furnace to a 95 percent efficient one. Would I have upgraded any way? Probably not because of the expense and added complexity, but I was motivated to upgrade quickly because there was a one year window and I didn’t want the furnace to die the year after the credit expired. In hindsight I realized that this tax credit was, in reality, a carefully crafted means of prying money out of bank accounts into a sagging economy, not so much an attempt to reduce natural gas use.
As the owner of a 23 year-old Cherokee, I desperately wanted to take advantage of the cash for clunkers handout as well and would have done so had the Leaf been an option at the time. Speaking of which, we will soon receive a $7,500 rebate on the purchase of our Leaf (in addition to the $3,000 we did not pay in state sales taxes).
Add that up somebody. Was it worth it? I don’t know, but we sure use a lot less oil than we did five years ago.
The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. This post originally ran on www.consumerenergyreport,com.
The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. This post originally ran on www.consumerenergyreport.com.