Thursday, March 30, 2006

Wind Power

Last year the U.S. led the world in wind production. While it did so with tax credits for wind generation, it did not require the use of the Kyoto Treaty. The rest of the world that signed the treaty has been upset at us for not signing it, yet here we are advancing non-"greenhouse gas" emitting generators faster than the rest of the world. This doesn't mean we are going to meet the Kyoto provisions (even most nations who signed on won't meet them), but it does show that all we need is a subsidy for cleaner generators to be produced more.

The U.S. has subsidized wind production for a while now, and is giving tax credits for wind generation for the next three years. The subsidies come beause wind produces virtually no air pollution, unlike the more common coal power plants. The subsidies give wind power an extra boost in sales. Already wind was becoming more comparable to coal in terms of price per kWh. Also, wind has been boosted by natural market forces, such as drought in Colorado, allowing power companies to rent or lease land for wind generation from farmers at cheaper prices. Other market forces exist as well. Most important of these are local communities' willingness to pay more for wind generation to avoid the pollution of coal.

That doesn't mean wind is beating coal in competition though. Given the vast abundance of coal in the U.S., keeping transportation costs for coal down, power companies are working to make coal much more efficient, at least according to the article. This will mean a reduction in emmissions of all kinds from the most polluting source.

Apparently, treaties and regulations aren't needed to reduce pollution. People naturally want to reduce pollution as their incomes rise. They are willing to pay more for clean air. The market, in this case made up of local communities, can thus result in lower pollution. While the Kyoto Treaty is much more market friendly than any CAC (command and control) alternative, time will tell if it was ever needed, or if it might even hinder clean electric development due to it's ability to hinder economic grow.

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