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State-owned energy companies are among the world’s most polluting – putting a price on carbon could help

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on The Conversation or enjoy below:

🗞️ Driving the news: State-owned energy companies, responsible for significant global emissions, present both opportunities and challenges for governments aiming to decarbonize
• Despite potential for easier control due to their ownership structure, internal conflicts and governance issues often complicate efforts to reduce emissions.

🔭 The context: Governments face a dual challenge with state-owned polluters: they have the means to support decarbonization financially but must navigate internal conflicts and stakeholder resistance
• The effectiveness of using these firms for rapid emission cuts is hindered by governance issues and the balancing act between environmental goals and financial dependencies on fossil fuel revenues

🌍 Why it matters for the planet: State ownership in the energy sector plays a crucial role in the world's carbon emissions
• With many of the largest polluters being state-owned, their management and reform are central to global efforts to combat climate change
• However, conflicting government incentives and the complex dynamics within state bureaucracies can impede progress.

⏭️ What's next: Research suggests that regulatory measures like cap-and-trade systems can aid in aligning state-owned firms with climate goals by resolving conflicts within government departments
• These systems, by putting a price on carbon emissions, could incentivize governments to enforce stricter emissions standards for their enterprises, potentially leading to a significant reduction in global emissions

💬 One quote: "This conflict indicates that state-owned firms are not simply 'instruments of the state' that can be easily directed to cut emissions quickly. The ability of governments to use state-owned firms to tackle climate change depends on various governance issues within the state bureaucracy."

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