Government Subsidies for CleanTech: Two Competing Views
Writing on government subsidies for cleantech, a reader notes: taxpayers get stuck with inefficient, inadequate and inappropriate technologies, which government agencies support for political and ideological reasons. This suppresses and discourages R&D for potentially superior technologies.
Let’s begin by admitting that there is some truth here. In fact, let’s look at two important sides of this issue:
There certainly are a few good examples of what the reader notes above. Corn ethanol is the poster child; it’s a cautionary tale about how a government program takes on a life of its own and becomes a kind of Hydra (the mythological creature that grows three new heads whenever one is chopped off). Once something like that is in place, it’s hard to dismantle because people get addicted to the money and will not vote against their own financial interests.
On the other side of the coin, in truth, there have been relatively few big failures in government’s support of technology, and there have been hundreds of major successes. We also tend to forget how ruined this planet would be if it weren’t for government regulation of the private sector. Who knows when we would have gotten seatbelts in our cars? God knows how polluted our air and water would be.
The government, by its subsidies, should not favor any particular clean power technology over others. Favoring particular clean power technologies carries the risk of causing other than the best technologies to be developed.
Regarding our mixed economy and the results of government action, I strongly recommend reading “American Amnesia: How the War on Government Led Us to Forget What Made America Prosper” by Jacob S. Hacker, Paul Pierson. For your convenience here is the B & N web page which includes the Nook electronic reader version:
http://www.barnesandnoble.com/s/American+Amnesia/_/N-8qa?_requestid=547928
I realize that convention specifies underlining the names of books, but this web site seems not to provide for that.
The guy makes a fabulously important point: the government played a role in virtually every technology innovation since WW II.
Craig,
I’m not sure about your claim ” the government played a role in virtually every technology innovation since WW II “.( I guess it’s how widely you define ‘role’ !)
Governments definitely have a duty to provide an appropriate regulatory system for commerce, and economic development. Governments also have a duty to provide sound economic policies for the overall economy.
Governments also have a duty to provide services that the private sector either can’t or would be inappropriate to provide.
It’s a delicate balance between a government providing stimulus and assisting industry remain creative, innovative and competitive, and becoming restrictive, partisan and attempting to pursue doctrinaire political agenda’s by economic measures.
There are those who adhere to a political/ideological doctrine that seeks to expand the role of government into every aspect the economic and private life of all citizens and institutions.
In contrast there are those extremists who decry any government involvement, no matter how slight or essential.
IMHO, both of these extremes are impractical (as all extremists usually are), In the centre there exists a legitimate role for government. Governments should be very careful about their involvement in industry, mostly providing governance and regulatory guideline for effective and efficient administration, not pursuing political or doctrinaire objectives.
Likewise, governments setting economic agenda’s must be careful to ensure that incentives a broad and don’t favour one particular technology of another. Taxpayer funds must be carefully invested for public benefit, not short term political gain.
The key to all government involvement, is careful and objective monitoring, with sunset clause and realistic targets. This prevents the establishment of implacable bureaucratic empires.
Not an easy task for governments expected to implement wise policies created by politicians who represent a fickle, and abusive, electorate.
Marcopolo,
There is nothing in your post with which I would disagree. However, there is room for expansion.
The federal government has funded research at many universities, research that probably would not have otherwise been adequately funded. That research has greatly impacted the lives of all of us. In particular, many advances in medicine are the result of government-funded research at universities. Most vaccines have resulted from government-funded research. A notable exception is the original polio vaccine which ended a horrible scourge; it was funded by the March of Dimes, a private charity. Electronics, computers, and navigational systems would be in a much more primitive state if development had not been government funded.
In the 19th century, the government funded railroads by giving them land and money. Unfortunately the land given to the railroads had been stolen from the Indigenous Americans, but that is a different matter. The government also funded colleges and universities. To be sure there was considerable graft and corruption involved, on a scale which many people would scarcely believe now, but overall we have benefited from it. Primary and secondary schools, together with compulsory education, are the result of government action.
Obviously, as we all realize, government funding and involvement can be seriously abused and it is unlikely that that problem can ever be totally eliminated. But the current objections to large government seem to be going much too far and are likely to impede progress.