Will Subsidizing Clean Energy Build Support for Cap-and-Trade?

blog-renewable energy subsidies-9.15.15A carbon tax – particularly a revenue-neutral one – is considered by many experts to be our best weapon against climate change. However, a new paper by researchers at U.C. Berkeley suggests that investing in clean energy first might be the better approach. (Read the Phys.Org article about the paper below.) The authors found that the more the clean-energy industry expands, the stronger support becomes for solutions such as cap-and-trade. They point out that most countries or sub-national entities that have put a price on carbon did so after first incentivizing clean energy.
There is overwhelming bi-partisan support in America for clean-energy solutions like wind and solar, and our own research has found that people don’t need to believe in climate change in order to favor renewable energy. In fact, being aware of the benefits of climate solutions can help make people more accepting of the reality of climate change. Solar energy is already less expensive than fossil fuels for many Americans, and it will get more affordable even faster with subsidies. The sooner we can transition to a low-carbon economy the better, and we should use all the tools at our disposal to get there.

How to Beat the Climate Crisis? Start With Carrots

To speed up progress in tackling climate change, policymakers need to build political support by investing in clean-energy industries rather than first penalizing polluters, according to a new policy paper by researchers at the University of California, Berkeley.
In the paper, to be published Thursday, Sept. 10, in the journal Science, a multidisciplinary team of environmental, political and legal experts finds that instead of emphasizing cap-and-trade schemes and penalties on greenhouse gas emissions – strategies considered to be most efficient by many economists – policymakers should begin by providing benefits through green industrial policies, such as subsidies and tax rebates.
The paper comes in advance of the United Nations Climate Change Conference, which will be held in Paris in December 2015.
“This paper is about how can we build political support for progress on climate policy, toward decarbonizing our energy systems,” said study lead author Jonas Meckling, an assistant professor in the Department of Environmental Science, Policy and Management. “We find that the more green industries form or expand, the stronger the coalitions for decarbonizing energy systems become. This runs counter to the prevalent notion that pricing carbon is the first-best choice in climate policymaking.”
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Image credit: NASA

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