Governments get better results from carbon taxes after they force new tech into use

A World Bank paper finds that carbon taxes work best after governments use mandates to force new green technologies into the market. This means countries trying to go green should prioritize regulations and standards before relying on pricing mechanisms.

For years, many climate economists argued that carbon taxes were the most efficient way to get companies to adopt green technology. This paper shows that for new technologies, governments get faster results by simply telling companies what to do. Only after a technology is established do carbon taxes become more effective.