GEB2350 Online, Spring’15
Chapter 9 Closing Case
Green Energy and Free Trade
9-17 Why have so many governments chosen to subsidize green energy initiatives? Can all
these programs be successful?
Many governments chose to subsidize green energy initiatives due to a rise in green house
gases, to reduce countries dependency on import of oil and coal. Not all of the programs
can be successful, due to a higher cost of clean energy. Higher cost of clean energy can
drive businesses out of business due to the over all increase in production which will drive
the cost of the product higher then the competitors from countries who use cheaper oil.
Germany, under President Angela Merkel, for example made a commitment to phase out
nuclear power by 2022, and already has a a large commercial battery plant, as well as cites
like Hamburg that is a model for clean energy city. Germany is a great example that green
energy initiatives can be successful and make country profitable in a long run.
http://rt.com/news/188372-germany-energy-renewable-batteryplant/
http://www.bloomberg.com/news/2012-11-20/germany-s-clean-energy-transforms-industri
al-city-of-hamburg.html
9-18 China has passed the United States as the largest emitter of greenhouse gases, which
displeases environmentalists concerned about global climate changes. China has
subsidized its green energy manufacturers, allowing them to dominate key industries, such
as solar panels, which displeases advocates of free trade. What would you recommend
China do? Should it accommodate its critics? Should it ignore them?
China should address the issue of the greenhouse gases, but first it will have to address its
relationship with USA. In 2009 China was put under diplomatic pressure from U.S Trade
