Incentives to Use More Clean Energy Work Best -- Study

On paper, applying the stick to carbon emitters -- charging greenhouse gas-generating parties, through either a direct tax or cap-and-trade scheme -- is widely considered the most efficient technique to solve climate change.

Of course, both methods, despite support from economists of diverse political perspectives, often meet political or industrial resistance.  Yet according to a new paper released last week, there seems to be a new theme among the cities, regions and nations that have successfully implemented vigorous carbon-pricing mechanisms: offering carrots.

"Policymakers need to build political support for emission cuts by pushing clean-energy industries rather than first penalizing polluters," said Jonas Meckling, the lead author of a study published Friday in Science.  Penalizing heavy emitters can trigger a backlash, he said.

Meckling and his colleagues found that out of the 54 nations and subnational jurisdictions that implemented some type of carbon-pricing mechanism by 2013, the majority -- about two-thirds -- had deployed either a feed-in tariff (FIT), a renewable portfolio standard (RPS) or both policies beforehand.

Policies like these, either FIT or RPS methods, can build coalitions and provide incentives for renewable energy firms, the authors argue.  "The more green industries form and grow as a result of government support, the stronger the coalitions for decarbonizing energy systems become," Meckling, an energy and environmental policy professor at the University of California, Berkeley, said in an email.  The paper's conclusion, he said, "runs counter to the prevalent notion that pricing carbon is the first-best choice in climate policy making."

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