US will need both carrots and sticks to reach net zero
Modelling suggests both carbon taxes and green subsidies will be necessary to decarbonise the US economy, but the inconsistent policies of successive presidents are the "worst case" scenario
Environment
Modelling suggests both carbon taxes and green subsidies will be necessary to decarbonise the US economy, but the inconsistent policies of successive presidents are the "worst case" scenario
By Alec Luhn
6 January 2026
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Subsidies can encourage the adoption of low-emission technologies like electric vehicles
Kent Nishimura/Los Angeles Times via Getty Images
Reaching net-zero greenhouse gas emissions by 2050 in the US will require not only the “carrots” of green subsidies, but also eventually the “sticks” of carbon taxes – which both appear unlikely under President Donald Trump.
The most effective way to reduce carbon emissions is by putting some kind of price or tax on them. But the US government has repeatedly failed to pass cap-and-trade legislation, which would cap emissions and require companies over the cap to buy allowances.
Subsidies are easier to adopt and can bring down the cost of low-emission technologies like electric vehicles, making a price on carbon less painful.
Wei Peng at Princeton University and her colleagues modelled the impact of subsidies, taxes and various timings of both to determine the best sequence of policies for reducing carbon emissions in the US.