Con

1. O.C.: Subsidizing requires financial resources that could be allocated to alternative

strategies. E.g. investing in renewable energy infrastructure, improving energy
efficiency in buildings/ promote sustainable transportation system may yield more
significant and long-term reductions compared to subsidizing firms

Evidence:
 Purpose of the firms: make profits
 Subsidy: carbon regulations still have adverse effects on profits
 Examples of other alternatives:
Denmark: adopted a policy that provided financial incentives for biomass power
generation. Biomass is a kind of natural resources in the world
Reference: Li,B., Geng, Y., Xia, X., & Qiao, D. (2021). The Impact of Government
Subsidies on the Low-Carbon Supply Chain Based on Carbon Emission Reduction
Level, 18, 2.
. https:// doi.org/10.3390/ijerph18147603
Cost-effectiveness and efficiency: compared to other polices
Some may argue the mkt.-based approach e.g. carbon tax can provide stronger
economic signals and incentive
E.g. In the analysis for the LTMS (Winkler, 2007; Hughes et al., 2007; Winkler, 2007), a
carbon tax was shown to be very effective in reducing GHG emissions, and was the
largest emission reductions of all options analysed

Winkler & Marquard, (2011). Analysis of the Economic Implications of a carbon tax.
Journal of Energy in Southern Africa, 22(1), 55-68
http://www.scielo.org.za/scielo.php?script=sci_arttext&pid=S1021-

447X2011000100006&lng=en&nrm=iso

[可反駁 mkt signal & demand creation: subsidy can drive customers preferences]