“If renewable energy was really better than fossil fuels then it would beat them. That’s how the free market works.”
Yes. That is how the free market works. And nowhere on the planet is there a true free market, including the United States of America.
A common argument that I hear about renewable energy vs. fossil fuels is that free market competition would determine the better energy source. “Better” of course is ignoring the obvious here where fossil fuels are harmful to literally all life on the planet and are also non-renewable sources of energy. “non” being the key here. In a world economy where supply and demand determine prices, who likes being at the mercy of OPEC every time they decide to fix prices for their benefit? And what about considering the fact that eventually these non-renewables are going to be depleted and we are forced to move to renewable energy anyway… if the planet survives that long. But ignoring these factors, of course, the better source of energy for consumers should definitely win in this completely impartial economy… Oh, wait – what about subsidies?
Subsidy: [Noun] a sum of money granted by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive
Regular talk – a subsidy is where the government helps lower the price of a good/service because it would not be able to survive market competition otherwise.
Despite big talk of capitalism, any tariff, quota, or subsidy is in fact a form of protectionism and negates the effects of a true free market so that certain industries will benefit. So how many subsidies does the fossil fuel industry get? Probably not much, right, because it’s so much “better” than clean and healthy renewable energy, right? Wrong.
The International Energy Association found global subsidies for fossil fuels to be at $548 billion, while subsidies for renewable energy was at $121 billion. And apparently the International Monetary Fund found that when they included indirect subsidies in the equation, fossil fuel subsidies worldwide are at $5 trillion! The indirect costs include things that fossil fuels are responsible for but are exempt from having to pay for such as air pollution deaths and environmental effects. And before the notion that they should be responsible for those things upsets you, we tax the heck out of cigarettes for that exact reason. Cigarettes alone are the cause of millions of pre-mature deaths and poor health – which we all end up paying for in some way through health insurance – so the government decided to tax (creating the exact opposite effect of a subsidy) cigarettes to discourage consumers from using something that was bad for them and our society as a whole, and put some of the cost burden on the cigarette companies themselves. Not such a bad idea, huh?
So that whole myth that renewable energy can’t keep up with fossil fuel energy is dangerously inaccurate. Rather than subsidizing an industry of polluters that employs fewer people, destroys our environment, and creates health problems for everyone, we should tax the industry and accurately reflect the costs that fossil fuels have on our planet… Or at the very least, even the playing field and watch the renewable energy sweep the floor with fossil fuels.
Although… the $150 million a year that the fossil fuel industry spends on lobbying Congress might get in the way of that…