Wednesday 06 Oct 2021 | 13:55 | SYDNEY
Wednesday 06 Oct 2021 | 13:55 | SYDNEY

Caps off to carbon


Sam Roggeveen


1 July 2008 19:47

Interesting to see that a part-Australian-owned company is having some success in the US renewable energy market, opening its solar cell factory in Las Vegas recently. But Fortune magazine's green business blog reports that the venture is under a cloud because Congress has to agree to continue the current healthy tax breaks for the solar industry, which makes solar competitive with non-renewable power.

A cap-and-trade system on carbon emissions — which both Obama and McCain support, if in different versions — is designed to have much the same leveling effect, making it more attractive to invest in renewables. In fact, it would be better than targeted tax breaks in that the benefits of cap-and-trade wouldn't be confined to the solar industry, but would give every form of renewable energy a more even playing field in competing with coal and gas.

My assumption here is that, once cap-and-trade is in place, the subsidies and tax breaks will be stopped. It also assumes the US (and Australia) will be able to come up with a fair price for carbon emissions. Both are big political hurdles against entrenched interests.