Policy Research

Expanding the Renewable Energy Industry through Tax Subsides Using the Structure and Rationale of Traditional Energy Tax Subsides

Blake Harrison

Summary

The article argues that traditional energy sources such as gas, coal, and oil have a disproportionally high level of subsides in the tax code. It continues that current subsides in place for renewable energy sources are inadequate and prevent the growth of the industry. It also argues that increasing subsidies for renewable energy sources will contribute to decreasing and controlling climate change and other environmental hazards. It also points out that encouraging renewable energy will help diversify energy costs leading to more stable prices and energy grids less vulnerable to attack or deterioration.

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Policy Implications

The article points out that although the cost structures of traditional energy sources and renewable energy sources are different in many ways, they equate to roughly the same financial burden. With this in mind, the article can be used to examine various potential changes to the tax code, at either a national or state level. It point out the fact that many subsides for gas, coal and oil do not include solar or wind. It also suggests that there are many long term gains from making renewable energy investment enticing.