REFF Wall Street: Bankers Disagree Over Subsidies

by Terrence Murray - June 22, 2011

The ongoing debate in the green finance community regarding the relative benefit of government subsidies continued at the REFF Wall Street conference on Wednesday. Amy Corinne-Smith, Co-Head of Global Cleantech Investment Banking at Jeffries & Company, had one of the few applause lines of the conference when she took congressional budget hawks to task for their efforts to slash solar subsidies.

“Every form of energy is subsidized,” said Corinne-Smith from the dais during a conference Q&A session. “People are fooling themselves if they think they can fix the budget by cutting $8-10 million in (California) solar subsidies.”

While many in the audience literally applauded her defense of government support of solar, Parker Weil, Managing Director of Bank of America Merrill Lynch was quick to caution the audience about a reliance on subsidies for green energy.

“Be careful what you wish for,” said Weil. “What the government giveth, the government can taketh away.” The Bank of America bigwig’s comments reflect a concern that investors will shy away from putting money into sectors that rely heavily on government funding to survive.

Government subsidies on both the state and federal level have been in the political spotlight recently, with republicans equating green energy subsidies with government waste. Democrats, for their part, are targeting tax breaks given to oil companies. In a Senate Finance Committee Hearing in May, ExxonMobil’s CEO argued that eliminating tax breaks for oil and gas companies would discourage future investment in energy projects. Exxon has long been a favorite of blue chip investors, with a market cap of $396 billion.

Leave a Reply