Subsidies encourage more energy consumption

To encourage people to use renewable heat, governments introduce subsidies that sometimes have unintended consequences, encouraging more energy consumption rather than reducing it.

Nº 60
some attempts made
past case
Region-1
Region-2
Region-3
Region-4
ongoing case
no attempts made

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Subsidies encourage more energy consumption

To encourage people to use renewable heat, governments introduce subsidies that sometimes have unintended consequences, encouraging more energy consumption rather than reducing it.

In 2012, the Northern Ireland Government introduced a policy programme, the Renewable Heat Incentive, to encourage the use of heat from renewable sources and reduce the carbon footprint of heating. As part of this, the government introduced subsidies for the use of renewable heating that were higher than the actual cost of heating. The scheme therefore led to increased energy consumption as people took advantage of the scheme to make a profit.

Macauley, C. (2017, January 18). RHI scandal: PSNI considering fraud investigation. BBC. Available at https://www.bbc.com/news/uk-northern-ireland-38656523

Muinzer T. (2017). Incendiary Developments: Northern Ireland’s Renewable Heat Incentive, and the Collapse of the Devolved Government. elaw Newsletter, 99, 18-21. 

Gill, G. S. (1976). Perverse economic incentives and energy conservation. Energy, 1(4), 445–450. https://doi.org/https://doi.org/10.1016/0360-5442(76)90072-4