Proposed policy reforms reignite debate over energy subsidies

jmurawski@newsobserver.comMarch 23, 2013 

“Subsidy” is a dirty word, used to discredit just about every known energy resource.

It’s the key gripe of critics who denounce solar, wind and other renewables as shameless boondoggles addicted to government handouts.

It’s also a swift retort of clean energy boosters who say that coal, gas, oil and nuclear power were either started or sustained with considerable government support. They cite tax breaks, depreciation allowances, research grants, foreign tariffs and other friendly policies to aid those industries.

They also say that heavy industries for decades were exempt from pollution controls, leaving the cleanup costs to someone else.

Nuclear plants, for example, likely could not be built without the 1957 federal Price-Anderson Act, which caps the financial liability of nuclear plant operators in the event of a catastrophic accident.

It’s also unlikely that nuclear plants could operate if the industry was required to have a solution for radioactive nuclear waste, which has been stored for decades in temporary cooling pools.

Economists generally agree that incentives and subsidies can be crucial to helping industries and sectors get established, but the benefits often become permanent once an industry becomes essential to the economy.

Precise quantitative comparisons are elusive, typically resulting in dueling reports.

The current effort in the N.C. legislature to repeal a renewables mandate has led to the latest salvo. In a February report commissioned by the N.C. Sustainable Energy Association and written by research contractors concludes that solar power and other renewables are reducing utility bills, because those alternative resources put off the need to build multibillion dollar power plants.

Murawski: 919-8932

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