Only 63 of 1,500 climate policies reduced CO2 emissions 

It should surprise no one that subsidies and regulations rarely change behavior. A recent study shows them to be largely ineffective in climate policy, too.

The peer-reviewed study, published last week in the journal Science, reviewed the effects of 1,500 climate policies implemented between 1998 and 2022 across 41 countries using a machine learning algorithm. The model identified significant breaks in carbon dioxide emissions (between 0.6 and 1.8 gigatons of CO2) and associated them with known policy changes. 

Only 63 of 1,500 climate policies were associated with any significant break in carbon dioxide emissions. That’s a success rate of 4.2%. 

The authors found that the most substantial CO2 emissions reductions were from “subsidies and regulations being combined with price-based policy instruments,” according to The Wall Street Journal: 

“By searching through the OECD database, which identifies 46 types of policy interventions, the study’s authors found government policymakers prefer subsidies and regulations, according to [Nicolas Koch, senior researcher at the Berlin-based Mercator Research Institute on Global Commons and Climate Change and an author of the study].

“We see a lot of policy packages built around these two policy types, and we find that it’s very rare that they really work in reducing emissions,” Koch said.

What the authors mean by benign-sounding “price-based policy instruments,” are “carbon pricing, and it could be energy taxes, it could be vehicle taxes.” These solutions, while attempting to harness the power of price signals, actually distort markets and promote malinvestment, while increasing economic burdens on families, stifling innovation, and infringing on personal freedoms.

Incidentally, the authors also show that what “works” to reduce carbon emissions in developed economies like the U.S. does not always work in the developing world, either. There were no “successful pricing intervention[s] with large emission reductions in the electricity sector of developing economies” despite 13% of studied policies being related to pricing. It seems likely that developing nations need reliable sources of energy, regardless of price, to move forward.

The U.S.’ predominant strategy to achieve its green dreams has been subsidies and regulations—to the tune of a projected $1.2 trillion in uncapped Inflation Reduction Act subsidies. If this study is any indication, taxpayers will be forced to spend billions of dollars and endure draconian restrictions on their energy use with nothing to show for it. 

This piece was originally published at the Independent Women’s Forum Center for Energy and Conservation on August 30, 2024.