How a Price on Carbon Can Inspire Investment
In the Financial Times' Energy Source newsletter, Karen Palmer shares results from a recent RFF report on the effect carbon pricing my have on investment decisions.
“Our modelling shows that in an uncertain world with a reasonable expectation that there’s going to be a [different] policy in the future, people might wait to make investment decisions,” said Karen Palmer, a climate policy expert at the Resources for the Future think-tank.
A carbon tax would overcome this problem, according to RFF. As companies would be able to assess spending plans based on a more complete picture of the future policy landscape.
Conversely, regulatory standards — especially if they are based on existing laws — will be vulnerable to legal attacks, obstruction and delays.
