Canada should subsidize renewable energy options such as wind and solar power in order to increase the share of renewables in Canada’s energy balance.
Canada government subsidizes a number of socially beneficial services, including health care, education and energy services. Subsidies to the energy sector mainly are for oil and gas production, however, they are not all socially beneficial[figure 1]. In fact, they have negative impact for the environment and hinder developments of environmentally friendly alternative energy options. Indeed, Canada’s implementation of the Kyoto Protocol is seriously threatened by continued government support for oil and gas production, a sector with large and rapidly growing greenhouse gas (GHG) emissions. There are two main reasons for us to switch to renewable energy. First, there are exhaustible supply of alternatives, non-renewable energy; Second, the earth’s limited assimilative capacities.
Increase usage of renewable energy sources will provide a wide range of benefits to Canada’s environment, economy and society. There are some important reasons why Canada government should support the development of renewable energy technologies. Renewable energies are environmental friendly, they do not contribute to climate change, air pollution, acid deposition, or large-scale habitat destruction, and they do not face the safety and waste disposal issues characteristic of nuclear power. For example, such as biomass, it simply releases the CO2 and absorbs back when their feedstock is growing, so the net effect on the atmosphere is zero. In contrast, the combustion of fossil fuels release greenhouse gases to the ozone and contribute to climate change by affecting the composition of our atmosphere. The National Center for Atmospheric Research conclude, there is no doubt that the composition of the atmosphere is changing because of human activities, and today greenhouse gases are the largest human influence on global climate. Canada has unlimited supply of widely available renewable energy resources, like solar and wind. Renewable energy technologies can be implemented cost-effectively in a number of applications, including solar water heating, space heating and cooling with heat pumps, passive solar design, micro-hydro electricity generation and remote power generation with solar and wind technologies. Renewable energy sources can also help to diversify Canada’s energy portfolio – an important consideration, as Canada’s carbon-intensive economy will become a liability with the implementation of the Kyoto Protocol. Renewable energy sources are the fastest growing energy sources in the world – the quantity of electricity produces by wind and solar power globally has increased by 20% and 16% per year, respectively, in the 1990s.
With government’s subsidies we are able to implement more renewables projects. However, the subsidies come from higher taxes now or in the future, because people engage in activities to avoid taxation, the cost of the tax exceeds the revenue yielded by the tax, this is known as deadweight loss[figure 2]. Deadweight loss is wasteful but they are an unavoidable part of any kind of government subsidies, unless the subsidy is use to correct a market failure. Government subsidy will increase public spending and reduce the net benefit of the subsidy. Switch to renewable energy also have a huge impact on the labour market. Whether renewable energy generates more jobs or destroys current jobs, it depends on the labour intensity. Many green jobs are substitutes for existing jobs, an increase in electricity generation from wind, solar, or biomass will substitute for energy from coal-fire plan, which in turn will reduce employment in coal mining and processing. The labour intensity for renewable energy is much higher in the...