Yesterday I suggested that markets might do as much for climate change mitigation as a non-binding accord. Fracking has reduced the price of natural gas which has (and is) replacing coal for power generation in in the US. Improvements in wind and solar technology have brought the price to renewables down to a competitive level. Going forward this trend is only like to accelerate.
But it's worth reflecting on how we got here. Markets didn't do this on their own. Two non-market forces were critical; first, direct investment by governments in tax incentives and loans (and yes some when bad like Solindra, but many bore fruit, and this was not picking winners and losers unless you think that betting on an entire industry sector is "picking" in which case it is). The second factor was setting expectations. Here the US government did three important things. It talked about climate change and made the issue and solving it salient. It made investments (walking the walk); and it signed the Paris Accord. Together these created a climate that drove research and development in the sector which is bearing fruit today. So before the neocons trumpet the triumph of market forces, remember that they didn't get here without a big helping hand from an enlightened government.
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