The early subsidies for nuclear power dwarfed all others, and even the high water mark of renewable subsidies, the 2006 jump after tax credits were renewed, barely equaled the low-tide marks of the early oil and gas subsidies during the Depression years. view folder sizes

While subsidising renewable energy generation is all very well, it carries the unfortunate stigma of 'winner-picking' - a notoriously difficult enterprise, let alone being morally fraught when using someone elses' money ie the scarce resources that are taxpayers' funds.

If you want to facilitate renewables, then all you need to do is make non-renewables relatively expensive, and the simplest way to do this is to focus your taxation effort on those non-renewables.

In order to not kill your economy, you simultaneously relieve the burden of taxation on everything that is NOT a non-renewable energy source - income tax, company tax, stamp duty, payroll tax, &c, &c.

Blindingly obvious, really. Perhaps someone should tell the government.

Tim Curtin writes: "At no time has any oil producer been paid by governments a supplement over and above the actual market wholesale price, as is the case with feed-in tariffs for wind and solar here."  This may be so.

Perhaps Mr Curtin would care to reflect on how US reliance on Middle Eastern petroleum has dominated US foreign policy, and hence dominated the costs ensuing from policy decisions made, over the last several decades.  

@Craig

This article is about the cost of subsidies both direct and indirect.  A publicly funded clean up of a nuclear disaster is a subsidy. 

So where is the source for  "With modern reactor design there is virtually no known scenario which could credibly result in damages to the community approaching US$10G, let alone in excess of it." ?

I think the discussion may have been a little bit divorced from the whole point of renewables policy frameworks. The two key reasons for subsidising renewables are a) that increasing renewables helps with energy security and b) that increasing renewables reduces the risk of dangerous climate change. There are a range of other reasons but these are the biggies.

It is true that fossil fuels are cheap and renewables arecurrently comparatively more expensive, but it is also clear that we need to tackle climate change. Subsidising renewables now (whether through direct grants, tax breaks, government backed risk mitigating commercial loan products, or indeed pricing carbon) is basically just designed to make renewables competitive. As the technologies are tested and as lenders get used to them and with more R&D, the costs will continue to come down, as they have been for some time.

Really, once we understand why we need renewables, the real policy debate should be about how do we go about getting to the final destination. And yes, part of that is about gradually reducing subsidies for fossil fuels and increasing subsidies for renewables.

It's just part of the broader social policy mechanisms we apply in all areas really, that we should impose costs on social bads (such as pollution and smoking etc) and reduce costs on social goods (such as being employed and generating energy without pollution).

So the question I'd like to see asked is whether there is the right trajectory in where subsidisation is allocated?

@ Warwick Forster:

Duck, dodge, weave... how about focusing on the topic of the article?  

@Craig.  Most people who buy new cars pay insurance for the unlikely event that they will have a serious accident and write off their investment.  Everyone is compelled to pay third party for possible damage they may incur to others.  This is not unlike investment in power generation where most investors will use various forms of insurance but nuclear investment is either indirectly or directly subsidised by the state.  You cannot avoid the cost of direct or indirect insurance costs when considering the cost of nuclear.  Ultimately, the risk of a nuclear accident will be borne by the community and are usually much larger than is considered by the nuclear industry such was the case in the Fukushima disaster.  My point is that your quote last September than no accident will cost more than $10b is obviously wrong and it undermines your argument about nuclear being so cheap once you factor in all the potential costs and insurance when nuclear is considered.  You should accept that you made a mistake by understanding the impact of a disaster by at least an order of magnitude or tell us what peer reviewed journal your $10b figure came from... 

Lets not forget another big subsidy/cost that oil has received/incurred over the years - military spending. 

Recent numbers released by the Pentagon put the cost of maintaining a carrier battlegroup in the Persian Gulf region for 30 years - just the battlegroup, not other forces - at around 7 Trillion $USD.

I wonder what state the US would be in right now if it could remove 7 trillion from its deficit.

@ Warwick Forster:

The issue under discussion is monetary subsidisation of various power generation technologies. You are dragging in the cost of remediation following accidents induced by natural disasters, a seperate issue altogether. I'll happily discuss that issue with you on a thread dedicated to it, but this isn't the place. That you see the need to throw this red herring into the discussion bodes ill for the contention of the article, namely the claim that renewable power tech has been unfairly undersubsidised compared with other power generation technologies.

@Craig...I agree that there are a number wildly varying estimates for the damage bill at Fukushima but I was simply quoting your own words last September "With modern reactor design there is virtually no known scenario which could credibly result in damages to the community approaching US$10G, let alone in excess of it."  Whatever the final cost, it will be far in excess of the 10 billion you talk about.  The relevant point this raises is the nuclear industry's inability to fully factor in the cost of clean up, containment and long term storage that are ultimately borne by the whole community long after a power station is decommissioned.

There are subsidies to most forms of energy such as fossil fuel, nuclear and renewables, but renewable technologies are usually more transparent as these subsidies are often direct such as Renewable Energy Certificates.  Privatised coal fired power stations which already had the transmission infrastrucutre and coal mines established by state governments were also subsidised.  Additionally, the levelised cost of energy needs to include the externalities of pollution from fossil fuel burning or the cost to the state of guaranteeing a nuclear facility for potential clean up, insurance and long term storage solutions for waste.  Once all the costs, subsidies, externalities and state underwriting are considered, a more objective measure of energy cost can be established.

If these subsidies to the coal industry were historical only, then we could excuse it, as it had indeed created many jobs and helped Australia to prosper. What must be very questionable is the fact the current Government plans to give more subsidies to the coal industry. This time it is a part of the “carbon tax” regime. The Government plans to pay for the closure of some power stations like Playford in South Australia.  The payment is a subsidy and helps to maintain the value of coal fired power stations.

 I cannot see that this money will ever be spent for environmental rehabilitation of old mines. The danger is that these new coal subsidies may help to lift the share value and the incomes of a few senior executives, but will not help reduce future liability of tax payers or provide any direct environmental benefits. Subsidies will keep on coming to the coal industry whilst renewable energy is blamed for the high cost of power.

@ Warwick Forster:

Some estimates are as much as 1/4 of a trillion dollars for Fukushima...nuclear doesn't seem so cheap any more...

There may be some disputing the figures in the article you linked to, but that's a bit of a red herring anyway in the present discussion, which is about subsidies for renewable energy, and whether or not renewables have received a fair deal. Why do you chose to attempt this diversion? Was the point I made earlier in this thread a bit awkward for renewables supporters?

The Government should concentrate on investing in renewable energy *infrastructure* and ignoring all calls for any energy price directives other than the flattest of taxes.
Subsidies distort markets away from the most efficient sources of renewable energy. This wastes energy and carbon.

Perhaps Craig has a point.  If the same numbers [ie "In inflation-adjusted dollars, nuclear spending averaged $US3.3 billion over the first 15 years of subsidy life, oil and gas subsidies averaged $US1.8 billion, while renewables averaged less than $US0.4 billion."] were applied to Australia, where renewables are 2% of power generated, then renewables would have been over-subsidised by 400%. 

"Submitted by Craig Schumacher on Tue, 2010-09-21 11:34.

With modern reactor design there is virtually no known scenario which could credibly result in damages to the community approaching US$10G, let alone in excess of it. Acocrding to your own link, the act was bought in at a time when the risks were not as well quantified as they are now."

Some estimates are as much as 1/4 of a trillion dollars for Fukushima...nuclear doesn't seem so cheap any more...

http://enenews.com/fukushima-meltown-cost-quarter-trillion-dollars-assum...

It may be stating the obvious, but this study ignores the unseen subsidies paid in occupational diseases, health costs arising directly from pollution and the future costs of climate change.

The current externalised costs of fossil fuels ( and coal in particular ) have been discussed here previously, and mounting evidence gained through economic analyses demonstrates that burnng fossil fuels is a very costly exercise. For those who call for a "sensible" discussion, we need to include ALL the costs not just the convenient costs.

Dear Peter,

                   Do you conciously ignore the regulation deficit that allowed the Fukishima disaster in ONE THE MOST HIGHLY DEVELOPED COUNTRIES.How can you guarantee such poor planning will not occur again

                     Did you know that timber subsidies, in the form of forest management and road building, ment that the Tasmanian people made more from selling coffee at The tahune forest airwalk than they did from all of the logging activities in Tasmania. This is without the thousands of hectares of state forest given free for plantation. 

Not to mention W.A forests which are in such bad shape they can not meet International certification.

Where is the economic benefit here?

Timothy

So what is it that republicans are fighting Obama for when he says hes going to close the tax loopholes for oil companies, and they say it will make oil more expensive.....subsidies they really do exist, just in different forms. Why should FIT be singled out?

giles it would be nice to link to the article directly.

http://tinyurl.com/3nqjhfg

While self-interest and rent seeking is a familiar activity of timber, coal, oil and gas, nuclear and now also renewables...does it make it right to continue?

Secondly, timber, coal, oil and gas, and nuclear had a strong economic driver, check your history books, but the theme (or perhaps promise) was "cheap energy". 

I have never read anywhere that renewables will be cheap.  Everyone knows that currently renewables are not cheap - plain old commonsense beating out PhD economists.

So it doesn't make any sense for rent seeking renewables to hunt for sheltered workshop status when they don't have the arrow of "cheap energy" in their quiver.  To overcome this, they have flailed around taking up cost reductions vs production numbers, projected technology breakthroughs...in fact extrapolated anything they can lay their hands on to overcome the fact that renewables aren't ready.  The problem or need may or may not be pressing, but the other reality is that nukes can solve the problem and gas can make a serious dent in it in the meantime.

By the way, some countries get it, for example South Africa who already has experience managing safety issues with nuclear ...the South AfricanGovernment has approved plans to boost its nuclear energy capacity by 9,600 MW (about 10% of Australia's installed capacity).

The concluding comments in the above article.."..and to further a distinctly American way of life" is nothing more than jingoism.  Ten years from now all this will look rather tawdry and pathetic.

Yes it is indeed a myth that Exxon et al have been and are being subsidised. Nowhere in the piece here is it stated what form the "subsidies" took/take, nor is there any mention of the huge excise and/or sales taxes levied on petrol etc. by most governments, at rates well in excess of the 10% general sales tax here or 20% in UK.

At no time has any oil producer been paid by governments a supplement over and above the actual market wholesale price, as is the case with feed-in tariffs for wind and solar here.

The correct way to compare the relative value of subsidies is to compare the amount of the subsidy per unit of energy delivered to the consumer. Once those figures are available we can discuss this matter sensibly.

Now that Ms Pfund and Mr Healey have produced their US report on energy subsidies, how would they like to take a break in Australia and do another one here?  It should be easier as there is no nuclear power industry. 

Or perhaps others already have all the figures to hand?