A Green Economy Needs More Than Subsidies
While carbon pricing and industrial policies may have enabled policymakers in the United States and Europe to avoid difficult political choices, we cannot rely on these tools to achieve crucial climate goals. Climate policies must move away from focusing on green taxes and subsidies and enter the age of politics.
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PARIS – In recent years, many policymakers thought they had found the perfect formula for implementing climate-friendly policies without facing difficult political tradeoffs: massive subsidies. This strategy, often associated with US President Joe Biden’s Inflation Reduction Act (IRA), has influenced several Western countries.