经贸专业英语报刊阅读教程 第一课 Good policy, a(3)

companies to switch some generation from coal to gas at the margin, but not high enough to encourage much innovation.

Blame politics. The price is determined by the cap, which is set by the European Commission in consultation with member states. Initially, member states

overestimated their emissions in order to get lots of permits, so the carbon price was lower than the commission had expected. For the second phase of allocations, from 2008, member states fought vigorously to get more permits than their

neighbours. Some sued the commission and, in September 2009, won. The price dipped again.

Thanks to a combination of recession and lack of political will, most estimates of the future level of Europe's carbon price have been revised sharply downwards this year. And if America gets a carbon price, it is unlikely to be high enough to make much difference. According to America's Environmental Protection Agency, the legislation Congress is now considering would set it at $12 a tonne in 2012, rising to $20 in 2020. That, by itself, is unlikely to encourage much new investment, so if America is to make a dent in its emissions, it will have to rely mostly on subsidies.

There is an argument for some of those. Basic R&D in new energy technologies—in carbon capture and storage, for instance, which would allow the continued use of coal to generate electricity—is too risky for most companies to undertake on their own, and offers enough social benefits to deserve government support. But the subsidies now on offer go far beyond that.

Governments are spending heavily on encouraging the switch to low-carbon

technologies, especially wind and solar power. “These policies are not particularly efficient, but they have been quite effective,” says Guy Turner, director of carbon markets at New Energy Finance. Some 50% of new power capacity added in the EU in 2000-06 was renewable energy, compared with 29% in 1990-2000.

This sort of energy is expensive. The best indication of that is the carbon price that would be required to make investment in renewables worthwhile without subsidy. According to New Energy Finance, onshore wind energy needs a carbon price of $38, offshore of $136 and solar cells of $196. Europe's target for generating 20% of its energy from renewable sources therefore looks pricey. According to Richard Green, director of the Institute for Energy Research and Policy at Birmingham University, the implied marginal cost of carbon would be €129 a tonne—which suggests that allocating such large resources to renewable-energy subsidies is, as Mr Green says, “seriously sub-optimal”.

The worst example of a wasteful subsidy is America's support programme for home-grown corn ethanol, which is coupled with tariffs on cheaper sugar-cane ethanol from Brazil. The programme has raised global food prices (and thus

increased malnutrition among the world's poorest); lined the pockets of America's farmers; given policies to cut carbon a bad name; and cut little, if any, carbon. Solar flare