Subsidies: “market-disruptive” and politicized

In Short

Subsidies could help, but they are uncertain to pass Congress as they are deemed unfair. Subsidies have also no unanimous support as much as global change denial exists.

A Few Details

Subsidies have to pass Federal Congress and State Congress as well, which may disconnect federal subsidies from state taxes when a state raises taxes that nullify the subsidies.

Subsidies are currently benefiting the rich green conspicuous people more than low-income households, as when rich households can build solar panels on their own roof unlike low-income households not renting an apartment with a shared roof.

Subsidy rules end up being as complicated as taxes are complicated, with a bureaucratic process for verification.

As subsidies are loosely linked to GHG emissions, they may not be seen as the best bang for the buck from the government in terms of GHG emission cuts.

Subsidies are as arbitrary as they are controversial and politicized, which makes economists wary of their market-disruption aspect for favoring a corporation more than its competitor. The same economists now lean towards “carbon pricing”, which should be less arbitrary and more market-friendly.

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