Commenting on the panel report, economist Amar Breckenridge says no:
The reason governments choose to support the development of renewables is not primarily because of concerns regarding the adequacy and affordability of supply. Rather it is because lower emissions sources of energy, such as renewables, confer a positive benefit to society that is not normally captured by market arrangements absent some specific form of government intervention. In such circumstances, economists speak of market failure as a result of externalities. One way to address this externality is by subsidising the production of energy from renewable sources. FIT schemes are one example of such subsidies. The benefit of the subsidy accrues to the producers of energy from renewable sources. In the absence of such a benefit there would be no incentive for them to invest. The public benefit to society from lower emissions is entirely predicated on there being a private benefit to the producers of energy from renewable sources. These private benefits take the form of fixed prices over a lengthy period of time representing a significant mitigation of investment risk – more so than would likely be available on commercial terms, and more than made available under contracts between government and private investors.
I'm eager to see what he has to say about the AB report.
