Madeleine Gabriel, a director at the charity Nesta, said: “Bills are soaring again because of high gas prices. Our reliance on gas is the reason we are in an energy crisis, so cutting funding for heat pumps makes no sense.
Mmm…I’d say that high gas bills—if they are high relative to electricity prices—are a good reason not to need a subsidy, because it means that people already have a potent incentive to switch to a heat pump.
You need a subsidy or a tax on something when there is a positive or negative externality, something that isn’t captured in consumer price information, because then purchasing decisions are made without incorporating that externality. You internalize the externality. But…in the case of a high gas bill, price information informing a consumer to switch is present. If they already want to switch on their own…shrugs
Not only that, but in general, for negative externalities, you normally want a tax, and for positive externalities, you normally want a subsidy. The issue with natural gas heating is the carbon emissions, which is a negstive externality. You probably don’t want a subsidy on heat pumps to internalize that, but rather a tax on natural gas heaters.
CompactFlax@discuss.tchncs.de 1 day ago
Creating energy independence is defence spending.