What I don't get is why policy makers doesn't see this as an opportunity for economic growth. Just start taxing emission and invest heavily in green technology and we could be on our way to start a new industrial revolution!
The US government's investments in both solar power and clean coal have been either failures or ended up costs wayyy more and taking twice as long. Typical of modern government projects but still bad enough where just saying "throw tax dollars at green tech" isn't as straight-forward solution as it seems.
Why not reduce taxes for corporations building green tech? And provide R&D credit to pay the salaries of engineers working on the problem? Reduce capital gains taxes on investments in green tech? Make it easier for really smart immigrants to come to the US to work on the problem? Create a commission who's job is to review and simplify/eliminate/modernize regulations to reduce barriers to entry in the marketplace? etc.
There are lots of ways to incentivize industry to solve this problem instead of adding more taxes and hoping the government works as a good VC.
The Canadian government tried (and is trying) the angel investor/VC thing here and it hasn't worked at all well. They do stuff like matching investments of other angels or giving loans to entrepreneurs. I'd much rather they made it easier for me to start and run a company by reducing the stuff they are already doing instead of doing more things... like pretending they are private investors. For example, they recently announced a Startup Founder Visa which I think is a great idea and a step in the right direction: http://www.cic.gc.ca/english/immigrate/business/start-up/
Not really sure about that. The cost of solar has come down dramatically and the technology has made huge strides in efficiency, largely because of the government subsidies. Sure, it's a financial failure for the government, but usually government subsidies are not intended to run a profit (lest the government be accused of profiteering or crowding out private investment).
University grants are a different beast. I was addressing the direct investments made in two organizations.
The problem isn't the perception of government backed businesses being 'wrong' for profiteering (or competing with industry?). Most people would be happy if the government made successful organizations that had a real impact (NASA in the 1960s). But successful large-scale government projects are rare today. Any gov tech gains in the past couple of decades were usually a minor side-effect of other massive investments (see: wars, intelligence gathering).
Modern nation states are simply not known for being good speculative investors nor good at running projects efficiently or cost effectively. Even when it's via private industry collaboration. But they are good at being politicians (ie, creating tax policy, managing regulations, etc). So my view is that they should focus on that and let industry be good at building technology.
I was at a conference a couple of years ago and there speaker was proposing that government taxation of tech companies should be higher (or words to that effect) as the underlying tech foundation they were building on was all government funded in the past. I really wish I had a photo of the slide but an amazing amount of the fundamental technology we take for granted today started life as very expensive, commercially unviable readership funded by governments. Their summary was that government is the only place that can fund and progress the technology foundation that companies later build on top of and that the idea that government is bad at tech is wrong - they are just bad at tech when funding is slashed to a minimum. Their main example was Bell labs and semiconductors and then the internet from what I remember.
I don't think the problem is government, the problem is funding - companies with limited funding would do an equally bad job of tech as a government department
Manufacture of PV panels is being further subsidized in China, something that generally isn't acknowledged in the West. If the CPC wasn't as paranoid of political change borne of discontent over smoggy cities, it's hard to say where PV prices would be.
Also bear in mind that assessing the 'cost of solar' is a toy problem as long as solar can't supply baseload power requirements.
Very little until the SolarCity facility comes online, and the battery storage at the Port Allen solar array has been disappointing and expensive, with batteries that died unexpectedly early.
Also, Hawaii gets its electricity from oil and gas shipped in by tanker and residents pay $.30/kWh; the utility there managed to negotiate $.15/kWh from SolarCity, which is almost certainly below their cost of production right now; they couldn't meet the utility's original tender and reapplied several times. I'm guessing that SolarCity is betting that over the life of their 20 year (!!!) contract they can bring their costs down and eventually turn a profit. I wonder about that bet, though, given that SolarCity isn't in great financial shape.
Anyways, I'm very much in favor of subsidized and incentivized solar power; what grates on me are people who assume that there's a great deal of unrealized value in clean technologies ("new industrial revolution!"). Converting to clean technologies will destroy value because oil and gas, especially when untaxed, are cheaper and easier to exploit. But of course we must convert because, well, 400ppm.
I'm confident that battery cost reductions will be substantial when Tesla's Gigafactory is at full production (they've already signed yet another utility scale battery storage deal in the last 10 days), cost reductions that will further increase uptake in energy storage contracts.
Cumulative global installed solar photovoltaic capacity will surpass 310 GW this year, compared with just 40 GW at the end of 2010. Polysilicon module prices continue to plummet; even if storage costs have not caught up, we can continue to drive out fossil fuel generation with more solar and wind, not to mention shifting loads to renewable generation hours whenever possible.
100% nuclear would work too but is politically unviable. Waste and the risk of accidents are a big problem, but at this point I believe they would be preferable to breathing in fossil fuel emissions all day.
"Baseload" isn't a real thing, it's just a framing. You need electricity generated when it's required by users, and in the exact quantities they demand.
Having nuclear power plants running all night when no-one needs the power is sub-optimal. That's why many nations built hydro storage and offered financial inducements for people to use power at night. Because the numbers wouldn't work for nuclear if it wasn't used at max capacity the whole time, producing a static amount, yet demand rises and falls both daily and with the seasons.
Doing the same thing, decades later, for solar is hardly rocket science, the only difference is the power correlates very well with air-con loads on both a short and long term scale which makes it a no-brainer for many locations around the world.
A call for a carbon tax is the free market solution.
Resistance to it just redirects efforts into exactly the kind of thing you are railing against.
Most carbon tax proposals a) have stopped using the word tax as people have a visceral, but non-logical reaction to it, b) are designed to be revenue neutral, since raising money is not the point, but changing behaviour, and so cut other taxes so that it balances out.
More taxes is not free market in any form. Considering the alternatives are not yet inexpensive enough for general consumption combined with the fact any tax on oil/coal/carbon etc would likely get pushed down to the consumer, it's largely just punishing consumers who are acting rationally and within their means.
By reducing taxes for green tech companies the focus is on acellerating the time when it can become widely available for consumers and consumers can purchase it without large economic trade-off. As a result the coal industry, which is already in steady decline, with continue to go in that direction. Oil will get squeezed.
Only at that point would it make sense to punish consumption of the harmful energy. But doing so now is just wishful thinking and harming the already strugglign middle class.
Free market is an inexact term, but I would think that nearly everyone would agree that one goal of having a free market is having it be efficient. Which, of course, is what a tax on negative externalities does:
At least on the hydro front, it's a difficult comparison. Quebec even more so - they have a lot of hydro opportunity.
France generates 85% from Nuclear, so effectively 'emissions free', but of course that comes with other complications.
I believe that Nuclear will be the way forward. Renewables are just not getting 'good enough fast enough' in a pragmatic way ... if we spent as much researching Nuclear I'll bet we'd have much safer choices by now. And most 'new reactors' are very safe. In particular CANDU reactors designed by Canada - and even they are decades old.
The reason Nuclear reactors are 'so expensive' to build has more to do with liability than anything. 'Insurance' is the expense - plus - there are very few entities capable of doing it and they have a 'military industrial complex' type oligarchy on it (i.e. it doesn't matter what the next-gen US fighter jet does, it will cost zillions - because he economic structure is there to make sure it costs that much).
A 'truly progressive' country should be investing in this as an option, the upside is just too good: enough Uranium to last centuries, with effectively no CO2.
What I don't get is why private industry doesn't see this as an opportunity for economic growth. Just start manufacturing green technology free of government incentives and subsidies and we could be on our way to a new industrial revolution!
"What I don't get is why private industry doesn't see this as an opportunity for economic growth."
There are thousands of companies trying. The inherent problem is that solar and wind are generally crap ways to make it work.
If you live near the equator, and don't regularly have access to electricity, and need a panel to power your TV for a few hours a day - then that's 'impact' but in the West it's really, really hard to make work.
While this is true, I think that there is much more to it. FinTech is taking business away from one of the strongest lobbies in the world, the financial sector, and the regulators all around the world seem to be embracing it, even bitcoin.
Why not reduce taxes for corporations building green tech? And provide R&D credit to pay the salaries of engineers working on the problem? Reduce capital gains taxes on investments in green tech? Make it easier for really smart immigrants to come to the US to work on the problem? Create a commission who's job is to review and simplify/eliminate/modernize regulations to reduce barriers to entry in the marketplace? etc.
There are lots of ways to incentivize industry to solve this problem instead of adding more taxes and hoping the government works as a good VC.
The Canadian government tried (and is trying) the angel investor/VC thing here and it hasn't worked at all well. They do stuff like matching investments of other angels or giving loans to entrepreneurs. I'd much rather they made it easier for me to start and run a company by reducing the stuff they are already doing instead of doing more things... like pretending they are private investors. For example, they recently announced a Startup Founder Visa which I think is a great idea and a step in the right direction: http://www.cic.gc.ca/english/immigrate/business/start-up/