What's the reason to subsidize alternative energy companies?

Marcel Then: Of course, the best solution would be to drop all subsidies and let all energy compete on a level playing field. * Sadly, we live in a world where it's impossible, politically, to take back subsidies that have been given already. So instead of eliminating old subsidies, we must give subsidies to new energy if we wish it to compete. * While I am opposed to such subsidies, I also have a problem with people who selectively oppose them. You can hardly fault alternative energy for simply playing the game as it exists. If you are anti-subsidy, oppose all subsidies....Show more

Lavelle Viveiros: Your question is essentially one that should be taken up as a question of economics and not the nuts and bolts of "alternate fuel vehicles." There are several reasons. One already mentioned is that most energy companies already get subsidies. But these are larger than the obvious grants and discounts, (credits on taxes.) In economics there is a concept of "external! ities." 1 Polution is cited as a prime example of an externality. It is part of the manufacturing/refining process but the cost of polution is not figured into the end product. (health issues, the costs of clean ups and filtration.) When I go out and buy an air filter I am to some extent paying for someone's polution. The water treatment plant is a cost that taxpayers bear for polution that has been done upstream. To the extent that some alternative energy options do not produce externalities they are being asked to compete against an unfair advantage. Subsidies attempt to level the playing field. There is another aspect as well. To the extent that alternative energy development is a social benefit it may be something that we should socially promote ie: subsidies. Last, any new company will have difficulties competing with an existing company where economies of scale, and product identification 2 are already in place.Sometimes it is difficult to put a number on ! some of these costs/benefits. The alternative may be to start! taxing companies for the polution that they produce and eliminating any subsidies that they currently get. Undoubtedly someone would complain when an existing benefit is taken away. Business as usual is hard to change....Show more

Chanda Wittwer: To be fair, all energy industries to date have been heavily subsidized for various political reasons. Whether it be Nuclear, Coal, Oil or Hydro, the infrastructures involved large sums of public funds. Alternative energies have typically been on much smaller scales where no single organization had the political clout to solicit public funding hence in comparison alternative energies have been far more privately funded then traditional energy.

Monroe Rainey: so if we want to discourage drug use, tax it? If the government discourages anything, then a black market opens up and innovation will take over.

Garry Ohmen: The idea is that by programming an economic inefficiency into an alternative fuel program, the! re will be more incentive to innovate on a practical level.