Debate Club

U.S. Can't Walk Away From Clean Energy Subsidies


The ongoing frenzy in Washington over the government's embattled clean energy investments has reached such a fevered pitch that you'd hardly know the Department of Energy's loan guarantee program expired months ago.

What that says is clear: The noisy debate is mostly about scoring political points, not about policy. The loan guarantees that helped ill-fated solar company Solyndra stay afloat temporarily--even though its technology wasn't competitive--won't be revived anytime soon. The government won't be trying to pick winners and losers like that anytime soon.

At EDF, we're not inclined to mourn these subsidies—we see them as an inefficient way to accelerate clean energy, and would much prefer to see market-based incentives do that work. They trouble is that Congress is opposed to market mechanisms as well as subsidies—so we're left without any accelerant at a time when China and other powerhouse competitors are using the levers of government to drive their clean energy champions to new heights.

[See a collection of political cartoons on energy policy.]

So where do we go from here? First, we need to acknowledge that big, capital-intensive energy projects involving billions of dollars and lots of jobs don't often get off the ground without public financing—whether they are concentrated solar projects, nuclear power plants, or advanced coal plants capable of capturing their CO2 emissions.

Second, we need to stop arguing over the merits of one recent and relatively modest government clean energy funding program—and think harder about the broader value of public financing for clean energy. Critics of the loan guarantee program and federal financing for clean energy in general conveniently hide the fact that conventional fuels—produced by the most profitable corporations in America's most mature industries—continue to receive tens of billions more in public funding than clean energy.

In a perfect world, we wouldn't need subsidies for the next generation of clean energy technologies. But the world isn't perfect. Instead, we find ourselves in a perilous moment, a time when critical public support for a nascent but promising sector of our economy is under attack—while the most profitable corporations in the world continue to enjoy subsidies they simply don't need.

The benefits of our investments in clean energy couldn't be clearer. The U.S. was a significant net exporter of solar energy products with total net exports of $1.9 billion in 2010. Solar jobs have doubled in the U.S. to 100,000 since 2009, and last year alone U.S. solar energy installations created a combined $6.0 billion in direct value, of which $4.4 billion accrued to the U.S.

[Check out the U.S. News Energy Intelligence blog.]

Still, the government is not always a good venture capitalist. Instead of picking winners and losers, the government can play a role by investing in the transformation of our electricity grid from an outmoded obstacle to progress to a nationwide facilitator of innovation—much like it did for the development of Internet infrastructure, which created an explosion of innovation and breakthrough American companies.

If our goal as a nation is to flourish in the next energy boom, if we want to claim our share of the $2.3 trillion clean energy market, we can't walk away from clean energy subsidies—so long as conventional fuels enjoy an artificial competitive advantage. It's time to put Solyndra behind us, heed its lessons, and get back to the business of growing American business, cleaning up our power sector, and securing our energy supply.

Eric Pooley

About Eric Pooley Vice President for Strategy and Communications at the Environmental Defense Fund

renewable energy

Other Arguments

59 Pts
U.S. Investment in Clean Energy Production Is a Must
46 Pts
Green Energy Investments Pay Off in the Long Run

Yes – Green Energy Investments Pay Off in the Long Run

Christoph Stefes Professor at University of Colorado, Denver

16 Pts
Green Energy Dramatically Benefits the Nation

Yes – Green Energy Dramatically Benefits the Nation

Maureen Reno Energy Economist at the Union of Concerned Scientists

6 Pts
Subsidies for Green Energy Do Not Help American Consumers

No – Subsidies for Green Energy Do Not Help American Consumers

Daniel Kish Senior Vice President for Policy at the Institute for Energy Research

4 Pts
Competition, Not Handouts, Should Determine Role of Green Energy

No – Competition, Not Handouts, Should Determine Role of Green Energy

Nicolas Loris Policy Analyst at the Heritage Foundation

-19 Pts
It's Up to the Private Sector to Invest in New Technology

No – It's Up to the Private Sector to Invest in New Technology

Jerry Taylor Senior Fellow at the Cato Institute

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