Monday, January 19, 2015

'Low oil price? increase carbon price!' 4 - The Economist edition

The Economist opens with a similar argument as the previous three posts on this topic (van Ardenne, Summers, Cochrane). However, they have a broader outlook, with different policies most advised for different parts in the world.

Due to the low oil price, which is expected to stay low for a while,
[politicians] can get rid of billions of dollars of distorting subsidies, especially for dirty fuels, whilst shifting taxes towards carbon use. A cheaper, greener and more reliable energy future could be within reach.
'Bin' the subsidies to oil companies (US) and consumers around the world (India, Indonesia, Venezuela); while taxing fossil fuels where it's not done yet (US) and integrate energy/electricity markets (EU), they recommend. In general, a complete overhole of energy policies may be needed in many countries. The low price of energy today makes it less politically daunting to actually do so.

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