The Effects Of Energy Subsidies On The Consumer, The Economy And The Energy Industry

The stage for a deeper integration of Renewable Energies in the UK was set by a number of these policies which has evolved over the years. These policies however were not delivering maximum efficiency when compared to other policies in other European countries. For instance, the inefficiency of some of the policy mechanisms when compared to those obtainable in Germany had been severally argued. The Energy White Paper 2003 was largely a response to the future of the UK Energy industry drawing from the failures of these past policy implementations.

The low price elasticity of demand for household energy given the lack of easy alternatives means that consumers will continue to purchase it even when prices rise drastically as we can see from extract A they did over the three year period. Furthermore the complex pricing structures in the energy market make it difficult for consumers to exercise any consumer sovereignty because they lack the information or indeed don’t know how to interpret it, to make a decision which is in their best interest.

Renewable energy has currently become a significant aspect in the countries generation, combination, and a constitution focus of government policy for energy, and environmental protection. As a result of public’s growing responsibility for the environment and constantly binding rules, and regulations of emission in the electric power industry, government has facilitated policies to boost the amount of renewable energy in the electricity generation portfolio. Additionally, the generation of electricity from renewable resources creates insufficient, and frequently, zero emissions of pollutants that comes from traditional fossil fuel production technologies. The additional use of renewable energy aids utilities in their emission agreement obligations. Furthermore, the anticipation of agreement with any future carbon emissions management would further toughen the incentive to move towards cleaner electricity creating technologies (Langwith, 2009).

Continued investment should be encouraged in order to develop the best technology in energy for the future. Continued investment will allow for new and exciting developments that will improve the energy industry in the long run. It will assist the industry in satisfying the growing demand and need for sustainability. There are a number of political and legal factors that are significant to the energy industry. For example, laws and government regulation on energy use could potentially affect the demand for domestic energy and thus lead to a shift in prices. However, with an increase of clean energy use, the demand for energy will not change dramatically due to laws and regulations, instead, the future prosperity of the globe will improve.

The United States is driven by capitalism, which is, “an economic system essentially based on the private ownership of the means of production, distribution, and exchange” (Free). This brilliant system allows for a prospering economy that is created by the people. In this system, it is common that businesses fail because profit is the driving force that keeps them going and only the strongest remain standing. While it may seem odd to link energy production to capitalism, the case can be argued that they share a connection. Energy production is a main avenue to the core of what capitalism represents. Each year, many energy producing companies profit millions of dollars since the world is dependent upon it. Considering this, these

There are several reasons why alternative energy is slow to catch on in our nation. One of the most compelling reasons is the unreasonably low cost of fossil. The government reaches this goal by widespread subsidies of certain industries. The oil industry alone is a recipient of around $8 billion in annual subsidies (Env. Adv. Stat., 2003). This makes the use of crude oil derivatives like gasoline and heating oil much more appealing than other, more expensive fuels. More interesting, is the effect that government subsidizing has on the

In “Alternative Energy Should Not Be Pursued” the author argues that alternative energy sources are in fact more costly and less efficient than traditional energy sources. Environmentalists and advocates of renewable energy propose that the world can be powered without producing harmful greenhouse gases via renewable resources; but the author argues, with the help of experts Peter Van Doren and Jeremy Taylor, that the higher costs would override any benefits. The United States government has bolstered the renewable energy industry since the 1970s with incentives and subsidies despite there being little to no economic benefit to promoting such types of energy production. The author also seeks to show that this is not a battle between “Big Oil” and an “infant industry,” but this alleged

Government subsidies are the benefits provided by the government of the country to specific products, businesses, or individuals in form of cash or the reduction of tax in order to back those products, enterprises, or people. There are usually static and gynamic effects of government subsidies. If to speak about the government subsidies in the United States, the biggest amount of them are given to energy companies that invest in US evergy facilities. These are companies that operate in the following areas: fossil fuels, renewable energy, nuclear energy, and energy efficiency.

Specific Speech Goal: Show the importance on why we should change our ways and convert to renewable energy.

This is some background into what subsidies are and why governments have them. Subsidies are grants given to businesses to stimulate the economy or help the taxpayers directly. First and foremost the only reasons subsidies exist is to help the taxpayers in a capacity that the government as the actor is not feasible. The tax payers are supposed to be the primary beneficiaries not the corporation tasked with helping the communities. Subsidies in modern context have been used to bailout large companies while the companies heads take home large

Not only do fossil-fuel subsidies undermine global efforts to mitigate climate change, but they also aggravate local pollution problems, causing further damage to human health and the environment. They represent a considerable strain on public budgets as well, draining scarce fiscal resources that could be put to better use, such as strategic investment in the education, skills, and physical infrastructure that people value most in the 21st century. Last, fossil-fuel subsidies distort the costs and prices that inform the decisions of many producers, investors, and consumers, thereby perpetuating older technologies and energy-intensive modes of production.

Subsidies – A subsidy is a payment made by the government to a producer. Because the supply curve is the marginal cost curve, and the demand curve is the marginal benefit curve, a subsidy raises marginal cost above marginal benefit and creates a deadweight loss from overproduction.

Renewable energy can be more affordable to people in the U.S. There are many possible ways it can be more affordable. For example, a renewable energy such as electricity can power automobiles with a be less expensive cost than to power it on fuel. Since fuel is related with international market, the price on fuel often result to inflation and deflation (Leistikow n. pag.). According to the chart on Gasoline vs. eGallon prices, Dan Leistikow compares, “Fueling your car with gasoline costs roughly 3 times more than fueling with electricity” (n.

In order for renewable energies to compete with the established fossil fuels, the playing field must be level. “The Congressional Research Service notes that fossil fuel subsidies are … as old as fossil fuels … and for more than 90 years have taken subsidies via generous tax breaks” (awea.org). One recent attempt to analyze subsidies on all levels pegged “2006 federal fiscal subsidies for energy at nearly $75 billion, with over 85% of those subsidies going to fossil fuels ($49 billion), nuclear energy ($9 billion), and ethanol ($6 billion). The remaining $10 billion in federal subsidies were split between the broad array of renewable energies with wind receiving 3.4%, solar 2.8%, and hydroelectric 2.2%.” The massive subsidies to fossil fuels originate primarily from

In Katrin Jordan-Korte’s book she compares strategies of implementation of renewable energy markets and technologies to find what is the most effective strategy. Through her research she attempted to answer what specific renewable energy techniques were the most effect and efficient while also trying to find whether or not stricter or more lenient government decisions lead to a more successful energy promotion. One conclusion Katrin finds is that, “Government promotion is important and is warranted to secure a sufficient diffusion of renewable energy sources,” (219). The reason she believes government promotion is necessary is because without there being enforced policies on the use of renewable energy then because of the difference in cost power generation companies would shy away from using renewable energy technologies. The two best options of government implementation of renewable energy usage are either through taxation on nonrenewable energy sources, or through rewarding power generation companies for using renewable energy sources. The benefits of taxation are the relatively immediate and obvious decision a power generation company would have to make of having to begin using renewable energy sources in order to save on the newly created high costs of fossil fuels. This technique has been used in Germany which did lead to an initial spike in the diffusion of renewable energy. The issue that Katrin believes will come with any government who uses this method is that for