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Without carbon pricing subsidies to renewables can be counterproductive

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THE world's economies have not been idle in the face of climate change. Companies and consumers are endeavouring to reduce their carbon footprint by investing in energy efficiency and changing their travel plans. Financial institutions are pressed to disinvest shares in fossil fuel industries by the “Keep it in the ground” campaign launched by NGOs and the media. In the last decade many countries, particularly EU Member States, have invested heavily in renewable energy sources such as wind and solar power, through generous feed-in tariffs, public tenders and mandatory renewable portfolio standards. China installed about 23 terawatts of new wind power capacity in 2014, almost half of the 53 terawatts installed worldwide. Rich countries have pledged to contribute up to $10 billion a year to the UN Green Climate Fund, with the aim to eventually reach $100 billion. This money is to be used to assist developing countries in adaptation and mitigation practices.

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