Subsidies for renewables “least effective” for the environment: economist


The Montreal Economics Institute, a non-partisan non-profit organization engaged in education and research, has published a document in advance of the Paris climate change talks, entitled A Practical Guide to the Economics of Climate Change.
In it, the authors discuss various measures that might be considered. Of particular note is Chapter 2 Governmental measures and their effectiveness and the discussion of Feed In Tariff subsidies for “renewable” sources of power. Here is an excerpt:

These subsidies are among the most expensive, and
therefore the least efficient, ways of reducing GHG
emissions. In particular, they have significant economic
and social consequences. By raising the costs of electricity
for the consumers who finance them, these
subsidies generate energy poverty among the most vulnerable
households. They also hurt the competitiveness
of companies that see their rates go up. The European
experience is telling. Several countries have had to
shrink the subsidies they give out to producers of renewable
energy.

In an interview on November 13 with journalist Rob Snow at radio CFRA, co-author Youri Chassin named Ontario as an example of how FIT subsidies don’t work, and actually cause hardship for citizens. If you do a cost-benefit analysis, Chassin said, you will see, they are the least efficient way to go. (Listen to the interview here, in the first half hour.)
This is in line with what Wind Concerns Ontario has been saying: Ontario NEVER did a cost-benefit analysis for its renewables program, particularly wind (it sure won’t do one now) and, whatever your goals are for the environment, wind power is not the way to achieve them.

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