US renewable energy: A carrot and stick approach

Pauline McCallion examines current risks surrounding the development of renewable energy resources in the US

Carrot and stick

Renewable energy in the US remains largely supported by government initiatives through either federal government incentives in the form of tax credits and cash grants, or the mandates for renewable energy use implemented in recent years by many states. However, the allocation of subsidies has been uneven and a fragmented regulatory regime continues to pose challenges for investors.

Other types of energy also benefit from government subsidies. According to the American Wind Energy Association

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