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Eco 346

Eco 346. Subsidies Negative Energy Balance. Advantages & Disadvantages of the government policy? Who is helped and who is hurt?.

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Eco 346

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  1. Eco 346 Subsidies Negative Energy Balance

  2. Advantages & Disadvantages of the government policy? Who is helped and who is hurt? The Volumetric Ethanol Excise Tax Credit which took effect in 2005 gave a tax credit of 45-51 cents to gasoline refiners for every gallon of ethanol they blended with gasoline. The tax credit cost $5.7 billion in subsidies in 2011. (ended 12/31/11) Note: Ethanol subsidies were in place for 30 years.

  3. Ethanol is primarily produced from corn grain starch in the United State • Some studies suggest that corn-based ethanol has a negative energy balance(it takes more energy to produce a fuel than the amount of energy the fuel provides). • However, recent studies using updated data about corn production methods demonstrate a positive energy balance (it takes less energy to produce a fuel than the amount of energy the fuel provides) for corn ethanol.

  4. Advantages & Disadvantages of a government regulation over the private solution.Who is helped and who is hurt? Installation of Energy Star-approved solar-power systems before the end of 2016: tax credit of 30 % of the cost. -The tax credit for 30% of the cost of installed equipment, is set to drop to 10% at the end of 2016. - The growth of solar power was helped by a 2009 federal stimulus package that extended a tax credit and provided other investment incentives for the industry. 

  5. Oil Subsidies http://environment.nationalgeographic.com/environment/energy/great-energy-challenge/global-energy-subsidies-map/ “What's particularly baffling is that while government support given to environmentally beneficial renewable power sources is subject to seemingly endless media and political scrutiny, the 500% larger subsidies given to oil, gas and (to a much lesser extent) coal rarely get much attention”. From:Fossil fuel subsidies: a tour of the data, The Guardian, 1/18/12 http://www.guardian.co.uk/environment/datablog/2012/jan/18/fossil-fuel-subsidy

  6. More on Oil Subsidies • “One rationale for subsidising fossil fuels is to help lift poorer members of society out of energy poverty. However, IEA data suggest that the poor receive a disproportionately small amount of the benefits. As the following chart shows, in most cases the poorest 20% of the population typically receive only around 5–10% of the benefits of the subsidies, suggesting that if the policies are designed for poverty alleviation, then they're not working properly.”From: Fossil fuel subsidies: a tour of the data, The Guardian, 1/18/12

  7. More on Oil Subsidies “It won't be easy [to reduce fossil fuel subsidies], of course – not least because of the powerful influence of the fossil-fuel lobbying machine. I don't know of any good global data about the relative size of the fossil fuel and renewables lobbies, but where figures are available, the hydrocarbon brigade massively outspend those pushing for clean energy – by a factor of 12 in the US, according to one estimate”. http://www.energyboom.com/policy/clean-energy-lobby-dwarfed-billion-dollar-fossil-fuel-expenditures-washington

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