Ideal Taxes Association

Raymond Richman       -       Jesse Richman       -       Howard Richman

 Richmans' Trade and Taxes Blog



A New Solar Plant Shows the Economic Dangers of US Commitment to Environmentalist Foolishness
Raymond Richman, 12/26/2010

Two news items that appeared just before Christmas demonstrate the inability of our leaders to learn the dangers to America’s economic future of our espousal of so-called green energy sources. The federal government is taking a huge risk in  subsidizing the construction of alternative energy sources like solar and wind power. The federal government wasted hundreds of billions of dollars in Pres. Obama’s  $800 billion economic stimulus plan by such subsidies and, as seems clearly evident, created very few jobs.

The first news item appeared in the Wall Street Journal, headlined “Spain’s Cuts to Solar Aid Draw Fire”. It reported that a group of international investors has called on the Spanish government to reconsider its plans to cut costly subsidies for solar power, “including existing power plants”. . In Spain, the government pays the extra cost “roughly 10 times the price utilities pay for power produced from conventional sources such as gas and coal”.  Last year, the government paid out €2.6 billion. Now it wants to reduce the existing subsidies. But investors who have acquired a vested interest in continuation of the inefficient subsidies want them continued. Apparently, our leaders are committed to the same foolishness.

As we reported in an earlier article, Professor Gabriel Calzada Alvarez of Juan Carlos University in Madrid found that for every green job created by the Spanish government 2.2 jobs were destroyed elsewhere in the economy. This has now been confirmed by Spain’s socialist-led government. Alvarez's findings, Investors Business Daily reports, have been backed up by Carlo Stagnaro and Luciano Lavecchia, “a couple of researchers from the Italian think tank Istituto Bruno Leoni. They found that in Italy, the losses were worse than they were in Spain.

In the U.S., subsidies take two forms. The initial subsidies to facilitate the construction of plants producing electricity from solar or wind are just the beginning. The plants produce electricity at a very high cost. So when they are connected to the electricity grids, power distributors are forced to buy the electricity and are authorized to pass the extra cost on to the consumers including businesses. It amounts to a sales tax on consumers of electricity.

The second news item is the announcement that the government has approved a guarantee of a $1.75 billion loan to a Spanish company Abengoa Solar Inc. to construct Solana, a 250-megawatt, concentrated solar power (CSP) facility located near Gila Bend, Arizona. The total cost of the project will exceed $2 billion. President Obama during one of his weekly addresses stated that after years of watching companies build things and create jobs overseas, it’s good news that we’ve attracted a company to our shores to build a plant and create jobs right here in America. Unfortunately, it will create only about 1600 temporary jobs building the plant and only 80 permanent jobs at the facility. To make matters worse, only 70 percent of the plant’s materials will be made in the U.S. No mention has been made of the price it will charge for its electricity. Nor of the increase in our trade deficit it will cause. By contrast, gas and coal-fired generating plants have very low cost per kwh and use all domestic materials.

The Abengoa plant is a good example of how small the contribution, if any,  of solar and wind powered electricity plants can be expected to make to the U.S. economy. Pres. Obama is ill-informed.

Your Name:

Post a Comment:


Comment by Steve the Tuna, 2/10/2011:

Those who know the cost of everything in today's dollars know the value of nothing and have no conception of a future.    May your kids enjoy dying in foreign wars to exploit the fossil fuels under the sands of dictators.




  • Richmans' Blog    RSS
  • Our New Book - Balanced Trade
  • Buy Trading Away Our Future
  • Read Trading Away Our Future
  • Richmans' Commentaries
  • ITA Working Papers
  • ITA on Facebook
  • Contact Us

    Archive
    Aug 2018
    Jul 2018
    Jun 2018
    May 2018
    Apr 2018
    Mar 2018
    Feb 2018
    Dec 2017
    Nov 2017
    Oct 2017
    Sep 2017
    Aug 2017
    Jul 2017
    Jun 2017
    May 2017
    Apr 2017
    Mar 2017
    Feb 2017
    Jan 2017
    Dec 2016
    Nov 2016
    Oct 2016
    Sep 2016
    Aug 2016
    Jul 2016
    Jun 2016
    May 2016
    Apr 2016
    Mar 2016
    Feb 2016
    Jan 2016
    Dec 2015
    Nov 2015
    Oct 2015
    Sep 2015
    Aug 2015
    Jul 2015
    Jun 2015
    May 2015
    Apr 2015
    Mar 2015
    Feb 2015
    Jan 2015
    Dec 2014
    Nov 2014
    Oct 2014
    Sep 2014
    Aug 2014
    Jul 2014
    Jun 2014
    May 2014
    Apr 2014
    Mar 2014
    Feb 2014
    Jan 2014
    Dec 2013
    Nov 2013
    Oct 2013
    Sep 2013
    Aug 2013
    Jul 2013
    Jun 2013
    May 2013
    Apr 2013
    Mar 2013
    Feb 2013
    Jan 2013
    Dec 2012
    Nov 2012
    Oct 2012
    Sep 2012
    Aug 2012
    Jul 2012
    Jun 2012
    May 2012
    Apr 2012
    Mar 2012
    Feb 2012
    Jan 2012
    Dec 2011
    November 2011
    October 2011
    September 2011
    August 2011
    July 2011
    June 2011
    May 2011
    April 2011
    March 2011
    February 2011
    January 2011
    December 2010

    November 2010
    October 2010
    September 2010
    August 2010
    July 2010
    June 2010
    May 2010
    April 2010
    March 2010
    February 2010
    January 2010

    Categories:
    Book Reviews
    Capital Gains Taxation
    Corporate Income Tax
    Consumption Taxes
    Economy - Long Term
    Economy - Short Term
    Environmental Regulation

    Real Estate Taxation
    Trade Miscellaneous

    Outside Links:

  • American Economic Alert
  • American Jobs Alliance
  • Angry Bear Blog
  • Economy in Crisis
  • Econbrowser
  • Emmanuel Goldstein's Blog
  • Levy Economics Institute
  • McKeever Institute
  • Michael Pettis Blog
  • Naked Capitalism
  • Natural Born Conservative
  • Science & Public Policy Inst.
  • TradeReform.org
  • Votersway Blog
  • Watt's Up With That


    Wikipedia:

  • [An] extensive argument for balanced trade, and a program to achieve balanced trade is presented in Trading Away Our Future, by Raymond Richman, Howard Richman and Jesse Richman. “A minimum standard for ensuring that trade does benefit all is that trade should be relatively in balance.” [Balanced Trade entry]

    Journal of Economic Literature:

  • [Trading Away Our Future] Examines the costs and benefits of U.S. trade and tax policies. Discusses why trade deficits matter; root of the trade deficit; the “ostrich” and “eagles” attitudes; how to balance trade; taxation of capital gains; the real estate tax; the corporate income tax; solving the low savings problem; how to protect one’s assets; and a program for a strong America....

    Atlantic Economic Journal:

  • In Trading Away Our Future   Richman ... advocates the immediate adoption of a set of public policy proposal designed to reduce the trade deficit and increase domestic savings.... the set of public policy proposals is a wake-up call... [February 17, 2009 review by T.H. Cate]