Government Subsidies to Correct Externalities The provision of energy is riddled with market failures. For instance, the U.S. maintains a military presence in the Middle East at least partly in order to secure energy supplies, but to what extent do U.S. consumers pay for that at the pump? Anecdotally, petrol costs about half in the States what it does in Europe. For another example, short haul flights are often cheaper than train tickets to the same destination, and yet, air travel is about ten times worse for the environment than is rail. Does the cost of either ticket account for this difference? Both the production and consumption of energy give rise to economic costs that are difficult to allocate. These externalities are a long-recognized economic problem. That is why we are in the midst of boom times for the alternative energy industry. For the most part, alternative means alternative to derivatives of crude oil, but it also seeks to substitute for coal and to a lesser extent nuclear energy. In many cases, demand for alternatives has exceeded supply. Similarly, demand for investments in new alternative energy technologies has exceeded the stock of available good ideas (Green Dreams, 2006). But has this driven up the price? Well, sort of. What has happened is governments around the world have stepped in to support alternative energy. According to The Economist magazine, 49 governments have made formal commitments. So while consumers by and large are still minimizing cost in the energy purchases, their elected governments have demanded dramatic changes in patterns of production (Investing in clean energy, 2006). There are broadly three reasons for consumer preference for alternative energy.... ... middle of paper ... ... to assure that society gets the package of output that it desires. Works Cited The answer, my friend? ? Can the windy Great Plains be a new power source, or is that just bluster? (2006, October 26). The Economist. Green Dreams ? The flood of money into clean energy is better news for society than it is for investors. (2006, November 16). The Economist. Investing in clean energy ? Tilting at windmills. (2006, November 16). The Economist. Hammond, P., Gamble, B. (2006, February 16). Simmons Oil Monthly ? Solar Energy Overview. Retrieved 17 November 2006 from: http://www.simmonsco-intl.com Campbell, J. (2005, February 12). NOPA Biodiesel Speech. National Oilseed Processors Association 2005 Annual Meeting. Wind Power. Wikipedia. Retrieved 17 November 2006 from: http://en.wikipedia.org/wiki/Wind_energy
James, Tom, and Peter Fusaro. Energy and Emissions Markets: Collision or Convergence? Hoboken, NJ: John Wiley and Sons, Inc, 2006. Print.
Madrigal, Alex. Powering the Dream, The History and Promise of Green Technology. New York: Da Capo Press, 2011.
.... Rosentreter, Richard. (Sept. 2000) Oil, Profits, and the Question of Alternative Energy. Retrieved Feb. 9 from http://www.findarticles.com/p/articles/mi_m1374/is_5_60/ai_65133031
Price fluctuations affect almost all the industries around the globe and industries within oil and gas production & marketing. The increase in Oil & Gas prices will directly force to inflate the daily commodities, food industry and transportation in major. According to Standard & Poor’s, energy spending will continue to stay at high levels for the next 25 years with projections of global energy demand to increase by approximately 1.5% annually between 2005 and 2015, and approximately 0.9% annually between 2015 and 2035. To be able to meet this increase in demand an estimated $26 trillion (in 2008 dollars) of globa...
Biodiesel is produced by subjecting the triglycerides found in vegetables oils and fats to transesterification, which is the exchanging of the alkoxy group of an ester compound by another alcohol. This creates an ox...
Turchi, Craig. 2010. Solar Power and the Electric Grid. edited by National Renewable Energy Laboratory.
The electricity sector in developing countries is increasing rapidly, however, there are a number of externalities linked with energy generation and the price of energy does not reflect all the associated costs. These externalities include effects on human health, the environment, climate, subsidies, agriculture as well as reactor accidents and economic effects (Bernal-Agustin & Dufo-Lopez, 2006) (Friedrich & Voss, 1993) (Edkins, Winkler, Marquard, & Spalding-Fecher, 2010). In the uncontrolled market, there is a inclination to produce more energy and produce a larger waste fuel supply than is socially optimal (Aronsson, Backlund, & Lofgren, 1998) therefore economic instruments are necessary to internalize the cost of externalities for optimal pollution.
The article states “Wind generators have
One of the ways that Saudi Aramco is trying to become more sustainable is by finding other alternate ways to cultivate energy. Solar energy is one way they are trying to make the future more sustainable. On their website, Saudi Aramco explains, “Saudi Aramco’s work is not just about our stewardship of the Kingdom’s abundant oil and gas reserves, but the quest to find cleaner energy solutions to power the domestic market and for export. We are committed to finding new and cleaner energy technologies and harnessing one of the Kingdom’s most obvious resources — sunlight.” (Saudi Aramco, 2014). With there being more than two hundred and fifty hours of sunlight each month, it would make sense that companies like Saudi Aramco would utilize the sun’s natural energy. Saudi Aramco goes on to say that having large deserts can be an advantage, because they can utilize this land to host large solar panel structures. (Saudi Aramco, 2014). These structures would have the ability to p...
The United States of America is known as the “Land of the Free and the Home of the Brave. America earned this nickname and has one of, if not the most productive economy in the world. However, one area that the United States shows great room for improvement in is the politics of energy. There’s plenty of ways that I believe America should begin preserving energy and become much more energy sufficient in general.Energy efficiency is defined as a way of managing and restraining the growth in energy consumption. In other words, using less energy in order to provide the same services. Since the late 1900’s, many countries around the world have been installing guidelines to improve energy efficiency. America’s energy intensity and efficiency ratings are nearly the lowest worldwide, due to its current debt, the immense population, and the nations recent budget cuts.
In conclusion the past years have been exciting for energy markets, energy policy, and energy supply and demand. Many people have made significant progress in understanding the importance of a basic resource, which they once took for granted. Americans can expect to have better tools for the future of energy and to be better at identifying and addressing these challenges.
The unsustainable nature of fossil fuels as an energy source, from the point of view of future availability and environmental impact, has spurred an interest in diversification of energy sources, with particular interest in renewable energy. The photovoltaic (PV) industry is a player...
The world’s focus on utilizing non-renewable energy resources, rather than renewable resources, is problematic because if the world uses majority of its resources we will not be able to replenish it in our current lifetime. The supply of non-renewable resources goes down as the demand goes up in correspondence to our growing population. Due to supplies decreasing and demand increasing, the prices of these resources will go up drastically. Oil for example, will become more expensive to drill because we have to drill f...
One of the most compelling arguments for the use of renewable energy is how many forms exist of it. Nuclear power, solar power, wind power, tidal power, hydroelectric power, pumped storage, wave power, geothermal power, biomass, and biogas are the most widely known renewable energy sources (Darvill, 2013). This large selection of fuels supports the idea of renewable fuels one day powering the entire planet. All the sources of energy have different niches and benefits. Solar energy is extremely ef...
Given the rapidly increasing population and subsequent burgeoning urbanization and steadily dwindling supply of energy, the energy crisis will continue to see a steep upward trend. In such a scenario, solar power seems be the only light at the end of the tunnel, and thus to manage it effectively is of paramount importance.