The American Interest
Analysis by Walter Russell Mead & Staff
La Cosa Nostra Goes Green

The Italian mafia has been raking in money meant to subsidize renewable energy in Sicily. The Washington Post reports:

In an unfolding plot that is part “The Sopranos,” part “An Inconvenient Truth,” authorities swept across Sicily last month in the latest wave of sting operations revealing years of deep infiltration into the renewable energy sector by Italy’s rapidly modernizing crime families.

The still-emerging links of the mafia to the once-booming wind and solar sector here are raising fresh questions about the use of government subsidies to fuel a shift toward cleaner energies, with critics claiming huge state incentives created excessive profits for companies and a market bubble ripe for fraud.

Italian corruption is nothing new, but this kind of graft in renewable energy investments extends beyond the reach of Sicilian crime bosses.

Picking winners and losers is the wrong way to use subsidies, as we saw with the Solyndra bankruptcy; it lends itself to crony capitalism and is a less efficient way to bring new technologies to market. The majority of spending ought to be funneled into research and development so that green tech like solar and wind power can succeed on its own merit.

There’s a lesson here for greens. Subsidizing nascent green technologies is  a near-sighted strategy and actually does more harm than good; propping up inferior technology only delays gains and efficiency improvements industry-wide. And, if you’re Italian, it lines the pockets of mafiosos.

Published on January 23, 2013 5:15 pm