U.S. competitors – like China and the E.U – aren’t making similar risky bets on new technologies in volatile industries because they’ve made broader efforts to encourage a strong renewable energy industry.
Debates over so-called industrial policy are, of course, decades old and an ideological litmus test for politicians. But the necessity of a federal loan guarantee program reflects the complete absence of political will on the part of either the administration or Congress to enact a cap-and-trade market, a carbon tax or other mechanisms – such as a feed-in-tariff (a nationwide premium paid for green electricity) – that would put a price on greenhouse gas emissions and level the playing field between fossil fuel and renewable energy providers.
China and European countries have adopted such economy-wide markets and thus do not have to make Solyndra-like gambles on new technologies in volatile industries. (Though China does provide many billions of dollars in low-cost loans, land and other incentives to a broad swath of its solar industry; inevitably, some of those companies will show themselves to be poorly run and will fail too. And Europe’s inconsistent renewable energy policies have played havoc with its industry.)
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Source: Todd Woody | Forbes