Renewable incentives should cease

1 February 2002

A recent Cato Institute report has found that mandating the use of renewables through a renewable portfolio standard (RPS) would accomplish little.

"Evaluating the Case for Renewable Energy: Is Government Support Warranted?" by Jerry Taylor, the institute's director of natural resource studies, and Peter van Doren, the institute's editor of regulation, notes that, despite over $11 billion over the last 24 years in tax credits, production credits and R&D, renewable sources account for only 2% of the total US electricity generation.

The report says that the cost of renewables makes these technologies unattractive in a deregulated marketplace. "Without policy privileges, the renewable energy industry (at least the portion that generates electricity for the power grid) would cease to exist." It goes on to say: "Advocates of renewable energy understand that and are now promoting direct use of government authority to mandate the use of renewable sources. Such policies use the power of government to impose the consumption preferences of advocates of renewables on others without any legitimate philosophical or economic basis."

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