by Art Woolf
Via Marginal Revolution (from an article in the LA Times), we learn that Obama administration economic and environmental advisors were warning about the pitfalls of the federal government's green energy "investments" long before Solyndra.
The taxpayers were expected to fund by far the largest share of the bills and also of the risk and in return they weren’t getting many benefits in terms of reduced pollution. In contrast, Caithness Energy and GE Energy Financial Services, the corporations behind the project, weren’t taking much risk but they stood to profit handsomely. I guess that is why they call it “green” energy.
The state subsidies involved in the project, the Shepherd's Flat wind energy facility in Oregon, were relatively small, if you call about $250 million out of a $1.2 billion project small. A similar accounting of some of the wind and solar projects that Vermont has embraced would probably have similar findings: Taxpayers (and ratepayers) are on the hook and the cost per ton of carbon saved is extremely expensive.
Alex Tabarrok, who wrote the post analyzing the advisors' memos, concludes
In the Solyndra case just about everything went wrong, including bankruptcy and possible malfeasance. Caithness Energy and GE Energy Financial Services are unlikely to go bankrupt and malfeasance is not at issue. As a result, this loan guarantee and the hundreds of millions of dollars in other subsidies that made this project possible are unlikely to create an uproar. Nevertheless, the real scandal is not what happens when everything goes wrong but how these programs work when everything goes right.
