While many climate activist groups enthusiastically advocate for the removal of fossil-fuel subsidies, we argue that this overstates both the climate effectiveness and political feasibility of such a strategy. Through synthesizing information from various global studies, we show that subsidies contribute to a relatively small portion of climate change and local externality problems, likely accounting for around 1%. We further argue that reform of fossil-fuel subsidies is hampered by various political and social factors, more so than the diffusion of carbon pricing. Based on these results, we argue that the far greater problem of unpriced externalities warrants a redirection or expansion of the enthusiasm for subsidy reform toward carbon pricing. This makes sense also as subsidy reform and carbon pricing essentially represent two sides of the same coin since both contribute to climate mitigation by raising fossil-fuel prices.@en

Ambitious climate mitigation policies face social and political resistance. One reason is that existing policies insufficiently capture the diversity of relevant insights from the social sciences about potential policy outcomes. We argue that agent-based models can serve as a powerful tool for integration of elements from different disciplines. Having such a common platform will enable a more complete assessment of climate policies, in terms of criteria like effectiveness, equity and public support. This article is categorized under: Climate Models and Modeling > Knowledge Generation with Models The Carbon Economy and Climate Mitigation > Policies, Instruments, Lifestyles, Behavior Policy and Governance > Multilevel and Transnational Climate Change Governance.@en