Economist: “Well-designed carbon prices can boost green power, encourage energy-saving and suppress fossil-fired power much more efficiently than subsidies for renewables.”
That’s pretty strait forward, but this is not what’s happening. If fact, it’s quite the opposite. Fossil fuels, as well as renewables are all subsidies in one way or another. Moreover, (most) economists have clearly emphasized that a carbon tax (perhaps even on product level and not on production level to also capture the carbon intensive transport system) would be much more efficient that most current policies. However, yet the developments look rather different – which is frustrating to most that follow the issue.
Since the turn of the century, global energy has become more, not less, carbon intensive. Take a major CO2 emiting fuel: Coal. It now supplies 41% of the world’s electricity and 29% of the world’s energy—a bigger share than at any time in at least four decades. (Though this is not the case in the OECD (around 18%), which I will focus on later.)