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by m_eiman
3912 days ago
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You should also include external costs to your cost of producing coal power; then is what the CO2 taxes are an attempt to do. That someone else is forced to pay to handle the effects of your pollution doesn't mean that this cost shouldn't be considered part of the cost of coal generated electricity. |
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The point I think (and to which I agree) is that real costs matter because anything can be "competitive" with enough subsidization. And subsidization doesn't make things cheaper in the real sense, it simply realigns incentives.
As is, renewables are heavily subsidized, fossil fuels are taxed heavily, and there's still a gap. It's trivial to close that gap through tax policy. So then the question becomes, what is the correct level of subsidization? I'm not sure, but I don't think the answer is "more, more, more". Because eventually you will eliminate the industry that is paying the taxes to offset the subsidized one. When it's no longer economically feasible to pay those heavy subsidies, that's when you'll see why the real cost of production matters.