GHG Daily
1/19/2016
Putting a price on carbon is not only the most economically efficient way to drive low-carbon technology innovation, it is also the fastest, according to a new report from the Grantham Research Institute on Climate Change and the Environment. “Public policies that put a price on carbon (emissions trading systems, carbon taxes or energy efficiency mandates) are a crucial driver for the adoption of environmentally friendly technologies and induce innovation in low-carbon technologies. The impact appears both large and rapid: much of the innovative response to climate change policy measures occurs within five years or less,” the report says.
The report also finds that public spending on low-carbon research and development needs to increase significantly over the next few decades in order for nations to meet climate targets set in the new Paris Agreement. The new deal sets a goal of limiting global temperature rise to well below 2 degrees Celsius. “It is difficult to give a precise figure for increased public investment, but the literature agrees that it should at least double,” The report says, noting that “some of the greatest funding increases are needed in low-carbon transportation, carbon capture and storage (CCS), smart grids and industrial energy efficiency.” In 2011, OECD governments spent around €14 billion.
