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Gresham’s Law of Green Energy

Jonathan Lesser explores how high-cost subsidized renewable resources risk destroying jobs and hurting consumers.

Conclusions

Industries that require never-ending subsidies simply cannot increase overall economic welfare. To conclude otherwise is to believe in "free-lunch" economics of the worst kind. Yet, freelunch economics are driving the push for renewable energy.

The subsidies paid by ratepayers transfer wealth from existing generators to a chosen few renewable resource owners. One may like to rail against the existing generators - as many politicians have - but the long-run implications of such subsidies will be to destroy competitive wholesale electric markets and drive out existing competitors. This course of action will cost jobs because businesses, forced to pay higher electricity prices, will either relocate, contract, or disappear altogether. It will reduce the disposable income of consumers, who will forever be forced to subsidize renewable resources (just as they must now subsidize corn ethanol producers) - all in the name of "green energy."

Cape Wind stands at the forefront of this new renewable energy push, one that is based on long-discredited - and, alas, long-believed promises.Unfortunately, it is politicians who are selecting the winners and losers in the renewables game, and the select few are benefiting at the expense of the many, i.e., the ratepayers. This is hardly a recipe for economic growth.

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Gresham Law Green Energy

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Source: http://www.cato.org/pubs/re...

JAN 10 2011
http://www.windaction.org/posts/29631-gresham-s-law-of-green-energy
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