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Carbon Taxes Alone Aren’t Good Climate Policy: Gernot Wagner

To drive down tomorrow’s CO₂ emissions, governments need to subsidize fossil fuel alternatives, too. 

A man looks at different solar modules at an in-house exhibition of Heckert Solar GmbH, in Chemnitz, Germany. 

A man looks at different solar modules at an in-house exhibition of Heckert Solar GmbH, in Chemnitz, Germany. 

Photographer: Jan Woitas/Picture Alliance via Getty Images

I love taxes.

OK, let me qualify: I love how simple the intended effect of taxes is, if and when it is intended. For climate change that means taxing carbon and watching demand for it go down. Markets will take care of the rest. The goal ought to be to find the right price for each ton of CO₂ and get out of the way. Economics 101.