The domestic energy argument, which is the same as
import substitution, and its positive impact on the trade
balance, is also a false argument. The trade balance determines
which parts of the production in a country are competitive
or not. Subsidization of a non-competitive industry, usually
implies a resource waste. There might be a case for initial
subsidization of a new industry (infant industry), but the
prerequisites for subsidizing an industry on this ground need
to be pretty strong. The wind power industry in Denmark is
an example of support to an infant industry. This industry
would not have been there if the government had not stimulated
the industry heavily in the first phase (Srrensen, 1991). One
might also argue that the reason why there is a market for
wind power technology is that other countries have subsidy
programs for this technology.
one industry like biomass energy.