“This house believes that subsidizing renewable energy is a good way to wean the world off fossil fuels.”

– ECONOMIST magazine, Online debate, November 8–18, 2011

[Ed. Note: Six years ago, the prestigious Economist magazine held an on-line debate on the future of energy policy. Despite a loaded affirmative motion (above), an upset victory was achieved with 8,916 votes opposed and 8,346 in favor of the proposition. The third most votes of 92 such debates, 70,000 visits produced 448 comments. Jon Boone’s writeup of the debate is reproduced below.]

Last month, The Economist magazine conducted a two-week Oxford style online debate over the proposition “that subsidizing renewable energy is a good way to wean the world off fossil fuels.”

“Renewable” in this case is really politically correct renewables: basically wind power, with some solar and a bit of of biofuel/geothermal thrown in.…

“Today’s reserve and resource estimates should be considered a minimum, not a maximum. By the end of the forecast period, reserves could be the same or higher depending on technological developments, capital availability, public policies, and commodity price levels.”

“The implication for business decision-making and public-policy analysis is that ‘depletable’ is not an operative concept for the world oil market, as it might be for an individual well, field, or geographical section…. [T]he concept of a nonrenewable resource is a heuristic, pedagogical device—an ideal type—not a principle that entrepreneurs can turn into profits and government officials can parlay into enlightened intervention.”

This essay, published by the Foundation for Economic Education (FEE) in the November 1999 issue of The Freeman, was subtitled, “Today’s Reserve and Resource Estimates Should Be Considered a Minimum.”…

“The Senate bill should serve as the PTC/ITC blueprint for the final bill…. [Such reform] is an important step, but only first step, toward a level-playing-field between electrical energies that will, longer term, improve grid reliability coast-to-coast, border-to-border.”

After 25-years of subsidy-driven financing, the wind industry is entirely reliant on tax-equity investors, willing to accept tax credits in return for funding a significant percentage of their project costs. Tax equity now accounts for up to 60% of the capital needed to construct a typical wind facility. The pool of investors with enough passive income to qualify for wind PTCs is limited and includes the largest financial institutions such as JP Morgan, Bank of American, Citi and even Google.

Said bluntly, Main Street Americans are coughing up billions annually to help the richest Wall Street bankers avoid paying their taxes.…

“At the end of the day, it seems that smaller markets are clustered at the higher end of the EV penetration ranking. This suggests it will be much more difficult to mandate and effect massive vehicle fleet shifts in favor of EVs in much larger markets without significant government subsidies and/or mandates, as well as significant infrastructure investment in EV charging facilities.”

“Tesla had about 80% of the EV market in Hong Kong. The cessation of the subsidy in April has raised the cost of Tesla cars by between 50% and 80%. Will Hong Kong’s EV penetration rate follow the others who have ended subsidies, and fall?”

The US Congress is hammering out the details of tax reform proposals from the House and Senate. At risk is a continuation of the subsidies for clean energy investments—investments in new wind turbines and solar panels, along with the subsidies for electric vehicle (EV) purchases.…