Re:America's first big offshore wind farm sets record low price
by Jeff_Brown on Thursday August 09, 2018 @09:39PM
(#17730058)
IF the government happens to choose the right technology to subsidize, then a subsidy is efficient. Suppose they pump a lot of money into wind, and then someone discovers a solar solution that's cheaper. That giant investment will have been wasted. By contrast, a tax lets researchers competing on a level playing field find the right substitute.
Re:America's first big offshore wind farm sets record low price
by Jeff_Brown on Thursday August 09, 2018 @09:40PM
(#17730062)
Also, a subsidy does nothing to reduce consumption before the subsidized substitute takes effect, which could be decades.
But I will say one thing for subsidy is it allows startups to enter a high tech space and take them as a funding source, ideally in proportion to how well the tech works.
Cap and trade can work out similarly (like Tesla selling their credits) to fund the R&D.
But the point is you want to do more than just tax the externality, if you can subsidize R&D by startups which fundamentally shifts the curve rather than just trying to move along it.