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.

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April 27, 2021

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The Financial Times

“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.

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