Next time you hear Aunt Teabag and Uncle Dittohead railing about socialistic subsidies to renewable energy, run this by them –
From What Would Jefferson Do? The Historical Role of Federal Subsidies in Shaping America’s Energy Future, from DBL Investors:
Using data culled from the academic literature, government documents, and NGO sources, in this paper we examine the extent of federal support (as well as support from the various states in pre-Civil War America) for emerging energy technologies in their early days. We then analyze discrete periods in history when the federal government enacted specific subsidies.
While other scholars have suggested that the scope of earlier subsidies was quite large, we are—as far as we know—the first to quantify exactly how the current federal commitment to renewables compares to support for earlier energy transitions. Our findings suggest that current renewable energy subsidies do not constitute an over-subsidized outlier when compared to the historical norm for emerging sources of energy.
For example:
As a percentage of inflation-adjusted federal spending, nuclear subsidies accounted for more than 1% of the federal budget over their first 15 years, and oil and gas subsidies made up half a percent of the total budget, while renewables have constituted only about a tenth of a percent. That is to say, the federal commitment to O&G was five times greater than the federal commitment to renewables during the first 15 years of each subsidies’ life, and it was more than 10 times greater for nuclear.
– In inflation-adjusted dollars, nuclear spending averaged $3.3 billion over the first 15 years of subsidy life, and O&G subsidies averaged $1.8 billion, while renewables averaged less than $0.4 billion.
$0.4 billion. That are “staggering” $1.20 per capita.
The study isn’t quite fair in its representation of the data. For example, the graph you present shows the historical average of subsidies to all forms of energy. Other graphs in that same study show that much of the fossil fuel subsidies came during the first three-quarters of the century, when there were no alternatives to fossil fuels. I strongly agree that all subsidies to energy forms should be limited to getting the energy form off the ground and nothing more. And it is totally inappropriate that fossil fuels received any subsidy whatsoever after 1930; by that time the industry was mature enough to take care of itself. The cumulative subsidies since then represent only the political power of the fossil fuel industry and are a historical embarrassment.
I also think that the accounting for nuclear is a bit unfair. The government gave enormous sums to the development of nuclear technology through the 50s and 60s because that technology had great value for military purposes. The use of nuclear reactors in submarines revolutionized that entire field, and getting safe, reliable reactors was a high priority. So too was the development of reactors for the creation of weapons materials, as were various reprocessing technologies. And there was considerable research in reactors for medical use and for use in satellites. At one time they were even researching the use of nuclear energy for rocket propulsion. The development of commercial power reactors did get some money as well, but it was not the primary recipient of funding. So it’s not fair to pin all those military expenses on the commercial nuclear power industry.
The problem we face is not what happened in the past, but what we’re going to be doing now and in the future; that’s what the study should focus on. I agree that there’s some political value in reminding everybody that the Feds were lavish in their support of other industries and should now be equally lavish in their support of new technologies. But I am very much a free market kinda guy and I find subsidies to be repugnant — again, except in the special case where economies of scale would render early support worthwhile.
For current policy, I strongly agree that we should immediately terminate all subsidies to fossil fuel and biofuels (using corn to make fuel is a travesty). I’d like to see all that subsidy money going to solar PV and possibly some advanced nuclear (especially thermonuclear). Thus, I am in overall agreement with the thrust of this piece; I’m just picking a few unfair nits.
fine, terminate all subsidies to any fuel. I can live with that. renewables win.
the point is, I’m sick and tired of the meme that renewables are some kind of artificlally supported creature of a political agenda.
Agreed, there is a lot of hypocritical noise coming from the right.