Policymakers are increasingly developing and launching green subsidy packages to entice investment in the climate transition, but new research has highlighted obstacles slowing the subsidy race. ‘The Global Green Subsidy Race’, published by the Economic Intelligence Unit (EIU), explores how green subsidies are reshaping climate policy and geopolitics, noting that many of these plans are “all carrot, no stick”. Incentives to discourage high-emissions activities are generally absent from green subsidy strategies, the report said, adding that this “may slow the mothballing of outdated infrastructure”. While the Labor government in Australia and governments across Europe have supplemented their green subsidy regimes with regulations designed to explicitly limit emissions, others, such as the US, have “no corresponding penalties for high-emission activities”. Further action is needed alongside the introduction of subsidies to upscale the installation and connection of low-carbon technologies and renewables to existing grid infrastructure, the report added.
