Thomas Friedman’s Fracking Fallacy | Hoover Institution

These major difficulties have not stopped the United States government from lavishing extensive subsidies on an industry that is ill-equipped to use them. These subsidies programs have failed for mundane but compelling reasons. No government has ever succeeded in trying to shape industrial policy with state subsidies, for the simple reason that it has neither the knowledge nor the incentives to pick which fields make sense to invest in or which firms in these fields have latched onto a viable technology.

No government should, of course, ban investments in solar and wind energy, but the prudent strategy is to let these investments be made by venture capitalists and other entrepreneurs who might actually know what they are doing. And currently, the smart money seems to be steering clear of renewable energy technologies.

via Thomas Friedman’s Fracking Fallacy | Hoover Institution.

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