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Review
. 2023 Nov 25;27(1):108584.
doi: 10.1016/j.isci.2023.108584. eCollection 2024 Jan 19.

Prioritize carbon pricing over fossil-fuel subsidy reform

Jeroen van den Bergh  1   2   3 , Cees van Beers  4 , Lewis C King  1
Affiliations
Review

Prioritize carbon pricing over fossil-fuel subsidy reform

Jeroen van den Bergh et al. iScience. .

Abstract

While many climate activist groups enthusiastically advocate for the removal of fossil-fuel subsidies, we argue that this overstates both the climate effectiveness and political feasibility of such a strategy. Through synthesizing information from various global studies, we show that subsidies contribute to a relatively small portion of climate change and local externality problems, likely accounting for around 1%. We further argue that reform of fossil-fuel subsidies is hampered by various political and social factors, more so than the diffusion of carbon pricing. Based on these results, we argue that the far greater problem of unpriced externalities warrants a redirection or expansion of the enthusiasm for subsidy reform toward carbon pricing. This makes sense also as subsidy reform and carbon pricing essentially represent two sides of the same coin since both contribute to climate mitigation by raising fossil-fuel prices.

Keywords: Environmental policy; Global change.

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Conflict of interest statement

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Figures

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Graphical abstract
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