What happens if policymakers are forced to "stamp on the brakes" and force carbon prices higher?
carbonrisk.substack.com
Financial markets have typically worked on the assumption that climate policy would be gradually tightened over a period of several years, if not decades. This is known as the “slow policy ramp”. Too high a carbon price at the outset for example, many reason, will be politically untenable. Instead the assumption is that carbon prices will gradually rise over several years. This is the familiar playbook seen across carbon trading schemes and carbon taxes where free allocations and numerous exemptions are the initial conditions.
What happens if policymakers are forced to "stamp on the brakes" and force carbon prices higher?
What happens if policymakers are forced to…
What happens if policymakers are forced to "stamp on the brakes" and force carbon prices higher?
Financial markets have typically worked on the assumption that climate policy would be gradually tightened over a period of several years, if not decades. This is known as the “slow policy ramp”. Too high a carbon price at the outset for example, many reason, will be politically untenable. Instead the assumption is that carbon prices will gradually rise over several years. This is the familiar playbook seen across carbon trading schemes and carbon taxes where free allocations and numerous exemptions are the initial conditions.