Skip to main content
Article
Picking Winners and Losers: A Structural Examination of Tax Subsidies to the Energy Industry
Columbia Journal of Environmental Law (2016)
  • Tracey M Roberts
Abstract
The shibboleth that “government should not be picking winners and losers” has dominated the public discourse over renewable energy subsidies.  This way of framing the debate ignores the nation’s long history of support for fossil fuels and obscures the economic theory behind the subsidies.  This article contributes to the discussion in four ways.  First, the article examines economic justifications for government intervention in markets and evaluates the tax subsidies to both fossil fuels and renewable energy resources in that light. Second, the article contrasts the different market trajectories for those investments and explores possible reasons for their divergence, including their budgetary history.  Third, the article examines the investment incentives that arise from the subsidy structures in terms of marketability, liquidity, information costs, transaction costs, risk, and uncertainty.  Fourth, it examines the political economy associated with the development and continuation of the subsidies.  A subsidy’s age, diversity, type, and beneficiaries affect its stability and longevity.  These factors also determine whether taxpayers report having claimed the benefits and whether administrative agencies evaluate them.  Finally, the article argues that the way Congress structures its subsidies can determine whether new energy technology is a winner or loser.  The article develops a generalized framework for structuring tax incentives and examines recent proposals for reform.
Publication Date
Winter 2016
Citation Information
Tracey M Roberts. "Picking Winners and Losers: A Structural Examination of Tax Subsidies to the Energy Industry" Columbia Journal of Environmental Law Vol. 41 Iss. 1 (2016) p. 63 - 137 ISSN: 00984582
Available at: http://works.bepress.com/tracey_roberts/9/
Creative Commons license
Creative Commons License
This work is licensed under a Creative Commons CC_BY-NC International License.