Subsidies: a tool plagued by arbitrariness
Subsidies are criticized for their arbitrary nature, raising concerns about their effectiveness as a primary instrument for supporting the green transition.
Subsidies are often controversial due to their arbitrary implementation, with weak correlations to greenhouse gas emission reductions. The rules governing subsidies can become as complex as tax regulations, involving cumbersome bureaucratic verification processes.
The arbitrary, controversial, and politicized nature of subsidies leads economists to question their potential to disrupt markets, as they may unfairly favor certain corporations over their competitors. As a result, many economists now advocate for “carbon pricing,” which is considered less arbitrary and more conducive to market dynamics.