“Nobody knows anything.”
William Goldman, a legendary screenwriter, made this observation about predicting the box-office success of movies before they open, but his comment could just as easily be about projecting the success of specific renewable-energy technologies before they are widely deployed. And that is why subsidizing the deployment of individual renewable-energy technologies—picking winners, in other words—is a bad idea, both for fiscal responsibility and for the long-term health of the clean-technology economy itself.
This does not mean that governments should do nothing. The support for basic scientific research and even applied R&D is one of the few governmental expenditures that actually produce a good societal return on investment. Funding a broad and sustained clean-tech R&D effort by government, academia, and even, subject to tight restrictions, within industry, makes a lot of sense.
But loan guarantees to private firms, whether those are Solyndra (bankrupt), Beacon Power (bankrupt), or Fisker Automotive (for a 20 mpg hybrid sports car), are a bad idea. The Obama administration has tried to combine an energy policy, a stimulus policy, and a jobs policy all in one, with the net result being both policy incoherence and charges of corruption, incompetence, and conflict of interest. As Larry Summers, then–Treasury secretary, wrote at the time of the Solyndra investment in an internal e-mail: “Government makes a crappy VC.”
