Wednesday, January 17, 2007

The Economist, Nov. 18-24, 2006 issue

This issue is titled Green Dreams. The special report article (Tilting at windmills, requires subscription) is about renewable energy and includes a discussion of how and why government subsidies are not the best way to encourage investment in renewable energy. The basic idea is that subsidies distort the market by making renewable energy look like a better investment than it might be. Another reason subsidies may not be the best idea is because the government decides which industries to subsidize and governments don't always pick the right industry.

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