Energy is a critical component for every economy and society around the world. Energy is divided into two groups, nonrenewable (coal, oil, natural gas, and nuclear) with a finite amount found around the globe and renewable (hydro, tidal, solar, wind, geothermal, and biomass) that are constantly being replenished so that they will never run out (Green Energy Choice, 2011). The international economic impact of renewable energy is explored by examining subsidies, strategic policies, and comparative advantage of renewable energy.
Renewable energy in its various forms can be over 5 times more expensive than conventional types of fossil fuel forms of energy generation and none are more efficient than most forms of natural gas or coal energy production (US Department of Energy, Levelized Cost of New Generation Resources in the Annual Energy Outlook 2011, 2011). In an effort to promote renewable energy governments around the globe have pledged their commitment to the development of renewable energy in the form of subsidies.
Feed-in tariffs have become a popular way to promote renewable energy for many governments on all levels. Feed-in tariffs work by setting a rate that renewable energy producers will be paid for energy over an extended period of time and the local utilities are required to accept all renewable energy to their grid at the stated rate of payment (Mendonca & Jacobs, 2009). Feed-in tariffs have been so successful because they are inclusive to all types of renewable energy, provide a stated fixed rate to be paid for cost analysis, and have no real cost impacts to governments because the end users are paying for the program in the form of high energy costs (Me...
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Skynews (January 7, 2009). Russia 'Cuts Off Gas To Europe'. Retrieved from
US Department of Energy. (2011). Levelized Cost of New Generation Resources in the Annual
Energy Outlook 2011. Retrieved from http://www.eia.gov/oiaf/aeo/electricity_generation.html
US Department of Energy. (July 27, 2011). World Energy Demand and Economic Outlook.
Retrieved from http://www.eia.gov/oiaf/ieo/world.html
Wolak, F. (January 19, 2011). Can the U.S. Compete With China on Green Tech?. The New York
Times. Retrieved from http://www.nytimes.com/roomfordebate/2011/01/18/can-the-us-compete-with-china-on-green-tech/our-comparative-advantage
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