Unforeseen high carbon pricing post-COVID and Ukraine war
In Short
The significant price surges following the COVID-19 recovery and the Ukraine crisis have not driven substantial change.
A Few Details
Since 2021, the sharp increases in oil and natural gas prices have effectively acted as a significant carbon pricing mechanism, resembling the kind of carbon tax that was long considered essential for advancing the green transition. However, this price hike was not the result of bold government policy but rather the rapid post-COVID economic recovery and sanctions on Russia due to the Ukraine war.
Despite this de facto carbon tax, there has been no significant progress toward a net-zero economy. Instead, European governments have even provided financial relief to support ongoing fossil fuel consumption.
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