As recently noted in the FT “putting a price on carbon is one of the most important financial questions the world has to answer”. Certainly Carbon pricing is essential because it creates incentives for decarbonisation; and makes green alternatives to fossil fuel based source of energy seemly more “economic”; however in reality the challenge of meeting a growing energy demand in a world recovering from the pandemic is far more complex.
The real opportunity is to find solutions that can achieve affordable, reliable, and greener solutions. Affordability and reliability may indeed be bigger hurdles; a faster and steeper carbon tax may help transform some enterprises; both affordability and reliability will remain the real hurdles for governments and consumers.
Everyone should be in favor of lower-carbon alternatives, but the real winners must find a way to deliver them reliably and affordably.
