November 28, 2011

Nathan Myhrvold On Renewable-Energy Subsidies

Nathan Myhrvold on renewable-energy subsidies – solar, wind, biofuels – on Bloomberg.
But they all share one thing that makes them appealing to investors: taxpayer dollars. One of the ugly secrets of the renewable-energy industry is that its products make no economic sense unless they are highly subsidized.
Justification for renewable-energy projects 
So why are they being deployed at all? The main argument -- often made by renewable-energy entrepreneurs and others who think that the U.S. should lead the world in “green” jobs -- is that once we start to produce renewables in volume, their costs will come down. So governments should merely subsidize today’s projects enough to push the technologies over their short-term humps.
But these arguments ignore the other, more productive uses that could be made of the money spent on subsidies. Rather than accelerate deployment of technologies that we know are inefficient, wouldn’t it be better to invest in the research and development that are needed to come up with renewable technologies that are cheap as well as clean? Subsidies also reward inefficiency, cultivate dependency on government largess and promote a rush to manufacture before the hard work of perfecting a technology is done.
All good arguments against subsidies. But then, 
The smarter strategy would be to boost spending on R&D toward a new generation of renewable-energy technologies that can compete in the marketplace without subsidies. A great deal of invention is required, so this won’t be easy or cheap. But it’s just the kind of challenge that American inventors and entrepreneurs have excelled at in the past.
Is he asking for subsidies for other energy technologies, such as nuclear?

Nathan Myhrvold and Bill Gates are investing in nuclear energy via Terrapower – a worthy technology for the long-term.  And in their spare time, they are busy enforcing their Intellectual Property rights.