Renewable Energy Subsidies Not As Effective As Originally Thought

wind-farm-texasThe rapid increase of wind farms in the United States and especially Texas is due largely to renewable energy subsidies.  The subsidies are currently the most popular policy instrument used to lessen carbon dioxide emissions and will likely continue due to the lack of absence of national climate legislation.  Studies have, however, revealed that these subsidies are not as beneficial as we may have thought.

The study conducted by Washington University revealed that in order for the wind power subsidies to be beneficial, the social cost of carbon dioxide emissions has to exceed $42 per ton.  The current social cost for carbon dioxide ranges between $7 and $81 and the projected cost for 2015 ranges from $12 to $116 per ton.

Texas electricity rates have been held below the national average, prompting many Texas voters to lean towards keeping the subsidies in place.

Although wind energy is emission free and reduces the output of fossil fuel generators, the emission rate of fossil fuels that is offset by wind energy relies heavily on which generators reduce their output.