To Be Sustainable, Green Energy Must Generate Adequate Taxable Revenue
What allows any type of energy to be sustainable? I would argue that one of the requirements for sustainability is adequate production of taxable revenue. Company managements depend upon taxable revenue for many purposes, including funding new investments and paying dividends to shareholders. Governments depend upon taxable income to collect enough taxes to provide infrastructure and programs for their growing populations.
Taxable income is a major way that “net energy” is transferred to future investment and to the rest of the economy. If this form of net energy is too low, governments will collapse from lack of funding. Energy production will fall from lack of reinvestment. This profitability needs to come from the characteristics of the energy products, allowing more goods and services to be produced efficiently. This profitability cannot be created simply by the creation of more government debt; the rise in the price of energy is tied to the affordability of goods, particularly the goods required by low-income people, such as food. This affordability issue tends to put a cap on prices that can be charged for energy products.
It seems to me that Green Energy sources are held to far too low a standard. Their financial results are published after subsidies are reflected, making them look profitable when, in reality, they are not. This is one of the things that makes many people from the financial community believe that Green Energy is the solution for the future.
In this post, I will discuss these ideas further. A related issue is, “Which type of oil production fell most in the 2018-2021 period?” Many people had expected that perhaps high-cost energy production would fall. Strangely enough, the production that fell most was that of OPEC oil exporters. These oil exporters often have a very low cost of energy production. The production of US oil from shale also fell.
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