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Performing due dilligence on green energy investments

By Andrew P. Morriss

Madam Chairman and members of the Committee, thank you for the opportunity to testify before your Committee as you consider the important question of the role of public investment in alternative energy sources, such as solar power, and the impact of that investment on our economy.

An aggressive push for public investment in alternative energy programs is underway in the United States and in some other countries. The appeal of proposals for such programs is easy to understand. They promise both increased employment and other economic benefits and improvements in environmental quality. As a lawyer and economist who studies regulatory programs, I cannot speak to the technical details of converting sunlight to electricity but I can make suggestions on issues you should consider as you exercise oversight in determining when and where to invest public money in such programs. I suggest five questions about investments in alternative energy programs, the answers to which I believe will help you distinguish among potential programs seeking support. These questions are drawn from my research, together with my coauthors William Bogart of York College, Andrew Dorchak of Case Western Reserve University, and Roger Meiners of the University of Texas at Arlington.

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