This is primarily when the efficiency improvements make a previously niche technology viable over a much broader range of cases.
This isn’t just the Jevons paradox, though that does amplify this. It’s also the claim that while a tax and subsidy are equivalent in the short-run, in the long-run the tax decreases the profitability of the polluting industry while a subsidy increases the profitability of the polluting industry, which may lead to increased pollution.
This isn’t just the Jevons paradox, though that does amplify this. It’s also the claim that while a tax and subsidy are equivalent in the short-run, in the long-run the tax decreases the profitability of the polluting industry while a subsidy increases the profitability of the polluting industry, which may lead to increased pollution.
The subsidy itself will also make the technology viable over a broader range of cases, yes… should have mentioned that part. Tried to get too clever.