Published on 28 January 2021
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Low-carbon policies can be ‘balanced’ to benefit small firms and average households – study

A review of ten types of policy used to reduce carbon suggests that some costs fall on those less able to bear them – but it also shows these policies can form the bedrock of a ‘green recovery’ if specifically designed and used in tandem.

Some of the low-carbon policy options currently used by governments may be detrimental to households and small businesses less able to manage added short-term costs from energy price hikes, according to a new study.

However, it also suggests that this menu of decarbonising policies, from quotas to feed-in tariffs, can be designed and balanced to benefit local firms and lower-income families – vital for achieving ‘Net Zero’ carbon and a green recovery.

University of Cambridge researchers combed through thousands of studies to create the most comprehensive analysis to date of widely used types of low-carbon policy, and compared how they perform in areas such as cost and competitiveness.

The findings are published today in the journal Nature Climate Change. The researchers also poured all their data into an interactive online tool that allows users to explore evidence around carbon-reduction policies from across the globe.

“Preventing climate change cannot be the only goal of decarbonisation policies,” said study lead author Dr Cristina Peñasco, a public policy expert from the University of Cambridge.

“Unless low-carbon policies are fair, affordable and economically competitive, they will struggle to secure public support – and further delays in decarbonisation could be disastrous for the planet.”

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