07.19.2022

The economics of taxpayer subsidies to ‘renewable’ energy

The more you subsidize something, the more you get of it … and at higher and higher economic cost over time to consumers and taxpayers.

The demand and supply graph below is very good but doesn’t tell the whole story. Taxpayer subsidies provide ongoing and perverse incentives to suppliers of ‘renewables’ (or anything else) to raise costs, reduce quantity and quality, and thus put upward pressure on consumer prices and for more subsidies. The former reduces supply (or at least the growth of) further and further, and the latter reduces demand (or at least the growth of) further and further.

Graph sourced from here.

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