Subsidies for Solar — Getting It Right

Here’s an interesting piece by super-blogger Marc Gunther, suggesting that subsidies for solar have been misapplied and have created weird market conditions. No argument from me there. Handing people money to do a certain thing is a guarantee that they’ll do exactly what you’ve asked them to do – and no more. Thus the imperative to be very sure you’ve been precise in that request. I’ll be the first to admit that, in the case of solar, we haven’t done that.

Simultaneously, the author discusses the need for innovations across a wide range of cleantech that needs to be rolled out over the coming 20 years, and suggests the need for a carbon tax.

Fair enough. But a stick with no carrot? Simply because our incentives have been applied imprecisely doesn’t mean the whole concept should be discarded. And if you honestly want to encourage innovation that takes decades to come to fruition, the dynamics of the “cash is king” market economy are not going to get the job done.