Economist Ed Dolan makes a thorough argument for using the upcoming expiration of the wind production tax credit as an opportunity to rethink energy policy seriously. In particular, his combined focus on energy policy and tax policy, and whether such tax credits are good examples of either (guess what? No), makes for an informative discussion. He also argues that such policy falls short because it fails to focus on the policy objective, which he defines as reducing negative externalities. For that reason, he makes the Pigouvian tax argument.
While he is more confident than I am that we can devise such a tax effectively, identify the magnitudes of such external effects as are Pareto-relevant, and implement them in a politics-and-lobbying-light way, I think it’s worth considering the extent to which such a proposal would be an improvement on the subsidies for commercialization that are the current renewables policy, which are an abomination of rent-seeking and inefficiency.