Wind Power is Not Sustainable; UK Climate Levy Harms Small Businesses

 Wind Power is Not Sustainable

In its July/August issue, Mother Jones magazine sings the praises of wind power, calling it the "latest energy boom." In its haste to trumpet the virtues of wind power the article fails to mention its considerable drawbacks. Ronald Bailey, science correspondent for Reason magazine, fills in the blanks.

Bailey shoots down the idea that renewable energy sources such as wind power are sustainable. "To be sustainable," he argues, "a power source would have to be economically viable." Even the best wind technology can cost two or three times as much as conventionally produced power.

Indeed, the so-called wind power boom is entirely the creation of government mandates in a dozen states, which typically require that between 3 and 8 percent of their electricity be supplied from renewable energy sources. "Without them," says Bailey, "it is doubtful that a single windmill would be constructed in the U.S."

As further evidence of the unsustainable nature of renewable energy, Bailey notes that 80 utilities in 28 states offer special renewable energy packages as an option to their customers. Participation in these programs is virtually nonexistent with no program boasting more than a 1.5 percent participation rate.

It turns out that, due to special tax treatment, companies often purchase wind farms as tax shelters. Wind farms, for example, can write off their capital costs in five years, as compared to conventional power plants that are depreciated over 30 years. "Because of this provision," says Bailey, "companies often buy wind farms to offset their profits and reduce their federal tax burden." Wind power generation also receives a 1.7 cents per kilowatt hour federal subsidy during it first ten years of operation.

The major selling point of wind farms, their lower environmental footprint, is also largely bogus, according to Bailey. A 1,000-MW wind farm would occupy 2,000 square miles compared to the 20 acres needed for a similar capacity conventional power plant. To replace total U.S. generating capacity of 604,000 MW would require 1.2 million square miles, or a third of the total U.S. land mass.

Baileys article is available at reason.com. The Mother Jones article is available at www.motherjones.com.

UK Climate Levy Harms Small Businesses

Despite the U.K. governments claim that its climate change levy would be fiscally neutral, a new report by the Federation of Small Businesses claims that it has been used as a stealth tax - a way of increasing taxation covertly. The levy works by adding a tax to the cost of non-domestic electricity, with different tax rates depending on the type of electricity used. Businesses are then compensated by a small cut in Employers National Insurance contributions (a tax on employing staff), and through the provision of an energy efficiency fund.

The reality is that the government has, even if inadvertently, used the climate change levy to raise taxes. Moreover, the levys effect has been most severe on small businesses, with 88% of small firms paying the levy worse off as a result. Most small businesses do not even know they are paying the levy, casting doubt as to whether the levy is being effective in changing energy use. The Federation has called for the levy to be scrapped.

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