Which are the most effective subsidies for green energy?

From Tyler Cowen.

"That is the topic of my latest Bloomberg column, here is one excerpt:

A recent study finds that, of all domestic subsidies, the most effective involve replacing the dirty production of electricity with the cleaner production of electricity. In practice, that means subsidies or tax credits for solar and wind power. Those are more than twice as effective as appliance rebates, the weatherization of homes, or subsidies for buying electric or hybrid vehicles.

Current local and national policies offer subsidies for both electric vehicles and for solar and wind power, though the specifics vary. It would be better if the US switched more of those funds into subsidies for solar and wind power.

Green energy advocates, however, tend to support public subsidies for any policy that reduces emissions. “Less money for electric vehicles” is not the kind of message they necessarily want to send. Nonetheless, in a world of scarcity and limited support for green energy projects, hard thinking about trade-offs is necessary.

When it comes to green energy policies, many countries are having trouble meeting their commitments. Australia, for instance, repealed its carbon tax a decade ago, and many nations are talking about a zero-emissions future in vaguer terms and with looser deadlines. The UK has a net zero pledge for 2050, but is not on track to meet intermediate targets. It’s folly to blindly support an all-of-the-above strategy.

So we need to choose, and this paper offers guidelines.

The original research is from Robert W. Hahn, Nathaniel Hendren, Robert D. Metcalfe, and Ben Sprung-Keyser."