Alternative Energy Sources - Essay Example

export or import based on competitive pricing and expertise, Bauman (2004, p. 13-15). A free market determines how the global economy functions based on comparative advantage. States are able to specialize on what one does best. Such scenarios would yield into timely production and supply due to the competitive nature of the operation. A free market would provide good incentives for producers to supply and respond to consumer demand. Extraction of renewable energy sources would be done at an increased competitive level of cleaner, cheaper and adequate energy.

Private equity investment, free markets attract private equity, which is reasonably important for investment in exploration and exploitation of renewable energy. Private investment injected into projects is crucial towards the creation of employment in the private sector to professionals who may not be fortunate enough to gain meaningful employment in the government. Investors in the energy sector may enjoy various incentives from the government which aims at encouraging investment in renewable energy sources.

Such incentives may include tax exemptions, tax credits and infrastructure development in extraction fields. However, allowing the free market can also be catastrophic to the economy, this argument presents a case for argument in favor of government intervention. According to Katrin Jordan (2011, p. 19-25), free-market approach encourages existence of natural monopolies and cartels. Liberalization of the sector would leave cleaner energy needs at the hands of a few with capital resources, thus holding state and industries functionalities at ransom especially when supply costs are low.

Monopolies and cartels create an artificial shortage thus increasing the cost of energy. Cartels have in the past been used to cripple crucial government operations thus it becomes necessary for the state to be involvement in