Rumours abound that the Coalition’s second budget might
introduce ‘Green’ subsidies for such items as domestic solar panels and private
electric vehicles, as yet another strand of its hydra-headed climate
policy.
Every sane economist would counsel against such steps:
•
Governments
should never try to pick winners. When politicians claim an ability to foresee
the future, the law of unintended consequences invariably runs rampant;
•
Coerced
subsidies are usually handouts from the poor to the rich. Always and
everywhere, climate change policies are severely regressive (i.e. they increase
child poverty);
