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Can We Afford Green Tech Subsidies?

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Rebecca Blank, the acting commerce secretary, says that this country must continue to subsidize “green tech.” Despite failures, she says, “The U.S. can’t afford to not be a major winner in this race.” She continued, “That necessarily means that there’s going to be some capital investment by the U.S. government. But it is new technology and that means that there is sometimes risks.” The most famous (but not the only) failure has been Solyndra. Blank said that the risk of failure is higher with subsidized “green tech” because of new, untried technology.

i6 Proof of Concept Centers

The Obama administration announced on September 29, that $12 million, will be awarded to winners (depending upon perspective) of a contest that awarded between $1 million and $3 million to six public-private green business development centers. Known as i6 Proof of Concept Centers, they are designed to aid green energy entrepreneurs when establishing small, fast-growing companies by connecting green energy researchers to business development consultants and financiers. Blank said that the $12 million in subsidies were subjected to the same high level of scrutiny that all federal awards receive. Can anyone say, bankruptcy? Why, one must ask, does a green energy entrepreneur, who is supposedly smart enough to start his/her own business, need a “Concept Center?”

Another Subsidy Program

At the same time, another $156 million was awarded to sixty research projects by the Department of Energy’s Advanced Research Projects Agency for Energy (ARPA-E), a creation of the Obama administration to find and subsidize technology research focused on green energy. Projects funded include $4.8 million to develop tobacco plants that produce oil, $3.7 million to get a plant usually used to make vegetable oil to produce jet fuel, and several solar panel projects. Again, I have to ask, Can anyone say, bankruptcy?

Can This Country Learn From Europe’s Mistakes?

In Europe, green subsidies are becoming more and more unaffordable.

  • Spain: Spain destroys an average of 2.2 jobs for every green job created. Since 2000, it has spent €571,000 on each green job, which includes subsidies of more than €1million per job in the wind industry
  • Italy: If Italy spent the same in the general economy as it has in the green sector, then that same amount of capital that creates one job in the green industry would create 4.8 to 6.9 jobs for the general economy.
  • Germany: Germany requires utilities to purchase different kinds of renewable energy at different rates. They must buy solar power at 59 cents per kilowatt-hour, while normal electricity costs between 3 and 10 cents. The subsidy for wind power is 300 percent higher than conventional electricity costs. The implementation of highly subsidized wind and solar power did not save German citizens money in energy rates because the household energy rates actually rose by 7.5 percent.
  • Denmark: Denmark has the highest electricity prices in the European Union. Denmark claims that 20 percent of its electricity is generated by wind power, but because it is intermittent, wind power has provided an average over the last five years of 9.7 percent of Denmark’s annual electricity demand
  • France: A French tax on electricity must be almost tripled next year to pay for a seven-fold increase in subsidies for solar energy paid for by Electricite de France SA. The tax increase, from €4.50 to €12.90 a megawatt — hour, is to pay for an increase in the cost of renewable power, mostly solar. The cost of solar power for state-controlled utilities is projected to rise to €915 million.

Is Obama (and his administration) hell bent on subsidizing  green tech with our tax dollars, regardless of failures, bankruptcies, and Europe’s mistakes?

Can This Country Afford To Continue Green Tech Subsidies?

The $64,000 question (I know, I’m dating myself) is: can we afford to continue green tech subsidies? Europe, especially Spain, could not, so why do we think we are any different? Sure, green jobs are nice. But, in the present economy, they cannot sustain themselves. And it is not the government’s job to subsidize them or to force us taxpayers to pay for them. If one or more companies that don’t receive government subsidies want to sponsor green tech, that’s fine. When/if the technology is ready and can sustain itself, the sponsor companies will make a lot of money. There is a name for what I propose: capitalism.

But that’s just my opinion.

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  • jamminsue

    You mention a “get a plant usually used to make vegetable oil to produce jet fuel” This fuel works, it was recently tried on fighter jets.

  • facetime

    German is also one of the largest exporters of wind turbines and solar panels world wide, second to china

  • Igor

    Every major industry in the USA was supported by the Federal government and US taxpayers in it´s infancy. Take transportation, for example: the tall Yankee Clipper ships right after the Revolution were subsidized by the government and soon came to dominate worldwide deep water shipping and that took years to payoff for the general population, but it did. We even sent Marines to The Shores Of Tripoli to knock the pirates around and discourage them from attacking the Clippers. The US government subsidized transcontinental railroads with direct subsidies as well as huge land grants and it took 40 years before that was profitable. The American taxpayer subsidized the aircraft and flying industries with airplane contracts, mail contracts and public financing of airports and the FAA and other support agencies. The US taxpayer supported the automotive and trucking businesses with subsidies, fleet contracts, and road construction.

    Every major business in the USA profited from the huge capital investments of the USA during the WW2 in new factories and machinery for the war effort that they kept after the war for private enterprises. That was the foundation for the postwar boom in American manufacturing.

    Throughout American history capitalism has turned to the taxpayer for financing of major new industries. Capitalism would simply NOT have been able to thrive as it has in America without the constant support of taxpayers in new ventures.

    New athletic stadiums always contain a huge public investment.

    New medicines and drugs are developed at NIH and publicly-funded university labs by scientists and doctors on the public payroll and then turned over to private companies for distribution.

    The computer industry was substantially developed by government funding of UNIVAC and many other machines.

    The internet itself is the child of ARPA. Without ARPA we´d be stuck with something nasty like IBM´s SNA, and there´d be about a hundred computers on it and they´d have black-and-white displays, about 80×24 characters.

    Basically, private companies, capitalists, have gotten a free ride on the government gravy train since this country was founded.