[quokwok]

If something has negative externalities, the solution is to tax the externality. E.g. a carbon tax will raise the price of fossil-fuel energy, which will make some green energy projects worth building. That's it -- job done.

Subsidising "good" projects is instead of taxing bad projects is the wrong way to do it, because the government has to evaluate every project proposal to figure out which projects should be subsidised. Whereas a carbon tax does it for you; all the government needs to figure out is the cost of carbon, and the market takes care of the rest.