The Policy Greenhouse

The Effects of Subsidies

Renewable energy subsidies have been the Fed’s primary means of accelerating growth in the renewable energy industry. The Renewable Energy Industry has been slowly growing in recent years due to more investments being made in hydro, wind, and solar power. Thanks to consumer incentives such as tax breaks for the installation of renewable energy systems like solar panels, there has been a resulting emission reduction. The slow transition away from fossil fuels has been a continuing trend in the world today, with China switching to 38% renewable energy powered electricity. The subsidy that the already growing renewable energy industry would receive from the federal government would also help to speed up the rate of switching from mostly fossil fuels to renewable energy-powered electricity generation. Furthermore, there is an expected increase in jobs and economic productivity that will come with a switch to a mostly renewable energy powered nation. The renewable energy industry would create many different jobs across many sectors such as manufacturing, installation, maintenance, and research. Subsidies are crucial for vitalizing job growth in these areas, as they provide the extra boost needed to expand local economies. These incentives to switch to renewable energy in the form of something like solar panels are what help maintain the eventual switch to renewable energy technology. This widespread adoption will lead to more skilled jobs being open in that industry, leading to the expansion of the renewable energy industry, eventually leading to a complete and total switch to renewable energy. As a whole, the use of subsidies is the best way to drive the transition to renewable energy, but also the best way to ensure economic resilience in the industry.

Potential Future Effects

The future of the renewable energy industry is also reliant on these subsidies being enacted right now. With current financial support from lawmakers, governments can provide investments in clean energy technologies such as wind, solar and hydropower. This pattern of investment and growth is something that has already been observed in other nations. Out of necessity, China slowly but surely funded a switch to a 38% renewably powered infrastructure. Renewable energy technology is a viable option, but the thing preventing the US from switching to renewable electricity generation is just a lack of funds and thus means to make the switch. With the funds from subsidies in the future, there can be more decentralized energy production because more residential areas and commercial areas will be fitted with the means to generate their own electricity. Once this is done, homes and businesses will be able to feed surplus energy back into the grid and power entire towns sustainably. One potential future change that will come to the economy in the future after this transition is the transformation of the energy industry to a mostly renewable energy platform, which leads to the need for new training programs done through the use of government subsidies to drive incentives for those who may want to join the renewable energy industry. With these subsidies funding the transition in the workforce there will be minimal job displacement and thus a smoother economic transition. All in all, the eventual transition to a renewable energy based energy industry in America is only possible with the help of renewable energy subsidies, so the government should continue to fund these efforts.  

Sources:

https://www.irena.org/Digital-content/Digital-Story/2019/Apr/How-To-Transform-Energy-System-And-Reduce-Carbon-Emissions#:~:text=Renewables%20and%20energy%20efficiency%2C%20boosted,in%20energy%2Drelated%20carbon%20emissions., https://www.iea.org/news/renewable-power-on-course-to-shatter-more-records-as-countries-around-the-world-speed-up-deployment#, https://www.scientificamerican.com/article/renewable-energy-is-charging-ahead/