Replacing Subsidies with Subsidies

Bjorn Lomborg -- the director of the Copenhagen Consensus Center -- is recommending that "[i]nstead of pouring more money into subsidizing inefficient renewables, we could make much cheaper, but more effective, investments in research and development into new energy sources." Discussions around subsidies invariably end in incoherence, hypocrisy, or redundancy, or all of the above. By definition, if renewable energy was truly economically efficient, it wouldn't need a subsidy. It is not clear what Lomborg is arguing for. What are these vague "new energy sources"? and who will be paying for these "investments in research and development"? If the public pays for these R&D investments in any direct or indirect form -- including and especially via the publicly-funded education and research systems, tax breaks/credits, etc. -- then this is just a different form of subsidization that doesn't get us to actual economic efficiency. All subsidies are inefficient, it is just that some are...(Read Full Article)