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What’s the Problem With Subsidizing Private-Sector Rural Electrification?

February 22, 2019

The United Nations Sustainable Development Goal 7 calls for universal electrification by 2030. We are going to start this article by saying something controversial about it.

Here we go.

“Achieving universal electrification requires subsidy.”

We’re not quite sure when this became controversial. But it did. And the history of electrification shows it must have been very recently.

It wasn’t controversial in 1935 when President Roosevelt implemented the world’s first rural electrification program, spending roughly 0.3 percent of U.S. GDP annually — or $18 billion in 2018 dollars — on government subsidized loans for rural electrification. Within two decades the proportion of electrified farms in the U.S. increased from 10 percent to over 90 percent.

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