The United States’ ambition to achieve net-zero greenhouse gas emissions by 2050 hinges on a critical, yet politically challenging, combination of economic incentives and regulatory pressure. Current policy trends suggest that relying solely on “carrots” – such as green subsidies – will ultimately fall short without the eventual implementation of “sticks” in the form of carbon pricing mechanisms.
The Limits of Subsidies
While government investment in clean technologies like electric vehicles and renewable energy infrastructure can accelerate the adoption of low-emission alternatives, these incentives alone are insufficient for long-term decarbonization. Research from Princeton University demonstrates that subsidies can reduce emissions by roughly 32% by 2030, but their effectiveness diminishes rapidly thereafter. This is because fossil fuels, particularly natural gas, remain economically competitive even with subsidized alternatives.
“Carrots can help grow green industry, but we still need sticks to really reach decarbonization goals,” says researcher Wei Peng.
The Case for Carbon Pricing
A more aggressive approach—introducing carbon pricing in 2035—could phase out fossil fuels more effectively, achieving over 80% emission reductions by 2050. This model acknowledges that simply making green technologies cheaper isn’t enough; there must be a direct cost associated with carbon pollution to disincentivize its continued use.
The Political Reality
The current political climate complicates matters. While the Biden administration invested in green infrastructure and clean technology incentives, a shift in power could reverse those gains. Former President Trump has dismissed these efforts as a “green new scam” and has a track record of dismantling environmental regulations.
This policy inconsistency creates significant economic hurdles. Delaying carbon pricing until 2045, for example, would require a 67% higher carbon tax to achieve net-zero than if it were implemented immediately. The longer the delay, the more reliance on expensive carbon removal technologies will be necessary.
Innovation and Global Context
Technological breakthroughs could potentially lessen the need for stringent carbon pricing, but that remains uncertain. Other nations, such as China and the European Union, have already combined subsidies with carbon pricing, creating a more comprehensive approach that is driving down the cost of clean energy technologies. The US could benefit from these innovations, but inconsistent domestic policy hampers progress.
The bottom line: Achieving net-zero emissions in the US requires both short-term incentives to foster green industries and long-term policies that make carbon pollution economically undesirable. Without this balance, the nation risks falling behind on its climate goals at a higher financial cost.
