Carbon pricing: not such a clean option

CARBON pricing has been hailed as the best way to bring down emissions and drive investment in cleaner technologies. New research suggests it could do just the opposite.

Over the past decade the world's capacity for renewable (green) energy has outpaced expectations as a significant source of global energy. Wind and solar capacity has grown 10-fold, while solar PV (photovoltaic) capacity is 50 times what it was in the early 2000s. The benefits are obvious; renewable energy brings with it energy security and diversity, it reduces local air and water pollution and provides accessible, affordable energy to communities who previously could not afford it or lived off-grid.

Despite these advantages, renewable technology has high investment costs and yields an intermittent supply of electricity. Among the many government strategies introduced to overcome these obstacles - renewable portfolio standards, minimum prices for "clean" energy and penalties for environmental damage caused by fossil fuel generation - the most significant has been the adoption of carbon pricing, aimed at incentivising clean energy investment and innovation.