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

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.

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.

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

Consumer will be affected by the consumer surplus of oil because gas will be cheaper. The producers surplus of oil will lose money because it costing more money to get the oil out of the ground than what it is bringing at the pumps so the consumer is affected by the subsidy in a positive way. The producer is affected by the subsidy because it will help make up for the producers loss.

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

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

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

This proves that there are benefits to using renewable energy such as the how they are affected by the cost of fossil fuels. They assert, “When the price of fossil fuels increases, the economics of renewable energy sources improves and there is an economic incentive to invest in renewable energy. When fossil fuels are cheap, many renewable forms of energy… fossil fuels increases, many forms of renewable energy become economically viable” (Enger and Smith

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

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.

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.

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.

Energy sector is one of the target sectors of Green Technology under the National Green Technology Policy. Various attractive incentives are given to businesses to encourage the generation of renewable

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

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