Economics serving society

Policy Briefs

July 2023

Energy transition: the cost of acceptability by Aude Pommeret, Francesco Ricci and Katheline Schubert

The energy transition can be achieved by making fossil fuels more and more expensive through increasing taxation on carbon emissions, or by subsidising investment in low-carbon energy production technologies. The first method is the most direct and effective, but it faces problems of acceptability. Here we determine the costs in terms of well-being (the social cost of acceptability) and for public finances of adopting the second method instead.