A study involving UC San Diego researchers suggests that financial incentives such as clean energy subsidies can significantly reduce greenhouse gas emissions, but without penalties for polluters, climate efforts will be in vain.
The research, published in Nature Climate Change, found that combining clean energy subsidies with pollution taxes can substantially reduce the emissions driving climate change.
“This work helps make our climate models more realistic about how governments actually behave,” said the study’s coauthor David Victor, professor at the School of Global Policy and Strategy and co-director of UCSD’s Deep Decarbonization Initiative. “For years, models have told us what’s economically efficient — but not what’s politically possible. Our goal is to bridge that gap so policymakers can craft strategies that survive real-world politics.”
The study comes out at a time when many clean energy projects and incentives are on shaky ground under the Trump Administration. The federal government has never implemented a “meaningful tax” on warming pollution, although some states have adopted small tax-like policies, a UCSD statement reads.
“In the United States, we are removing the reward policies designed to accelerate decarbonization and it’s unlikely this administration will introduce any policies that punish larger emitters,” Victor said. “Meanwhile, other countries are taking different paths — China is adding new incentives and some penalties and Europe is leaning heavily on policies that make emissions more expensive. You’re seeing a global experiment in real time.”
The model used by the researchers — from UCSD, Princeton, University of Maryland, Harvard and others — explores how emissions can change when climate policies are added, delayed or repealed over time. They looked at different scenarios, such as using incentives only, penalties only, a combined approach and an inconsistent policy approach.
The authors of the paper used the “carrot and stick” metaphor of rewards and punishments to encourage decarbonization.
“As “carrots” make it cheaper for companies and consumers to adopt green technologies, those technologies see greater uptake,” they write. “Introducing “sticks” is essential to reach deep decarbonization goals in the long run.”
In addition to finding effective theoretical approaches, the study also showed that consistency is key. When incentives are applied reliably, researchers found the economy can reach an 80% reduction in energy-related carbon emissions by mid-century. When those incentives are withdrawn or delayed, investment slows and later emissions cuts become more expensive.
“When policy is unpredictable, companies delay investment,” Victor said. “That delay can make it politically and economically harder to act later.”
The multi-institution study is part of UCSD’s Deep Decarbonization Initiative efforts to make climate change studies more palpable and actionable.
“For years, analysts and reality have been drifting apart,” Victor said. “This work is part of a larger mission to make studies of climate policy much more realistic about what happens in the real world — how government policies affect investments and emissions.”
City News Service contributed to this article.
