If global warming is to be curbed, the world needs to move away from fossil fuels as quickly as possible - almost everyone agrees. How to achieve this is more difficult. Economists have long favoured a carbon price, a mechanism that Europe introduced in 2005. This allows the market to determine the cheapest unit of greenhouse gas to reduce, allowing society to fight climate change at the lowest possible cost. Others, including many U.S. politicians, worry that such systems will backfire by raising consumer costs. Under President Joe Biden's leadership, America is instead spending hundreds of billions of dollars to support green supply chains.

Yet it is remarkable that the rest of the world is now becoming more like Europe - carbon prices are spreading in rich and poor countries alike. Consider Indonesia, the world's ninth-largest polluter. Despite emitting 620 million tonnes of carbon dioxide equivalent a year and nearly half of its soaring energy consumption coming from coal, the country has green ambitions. At the launch of its first carbon market on September 26, President Joko Widodo touted the country's prospects as a hub for carbon trading, and local banks duly bought up credits from a geothermal energy firm. The country also introduced a local emissions trading scheme in February that requires large coal-fired power plants to buy emission allowances above a certain threshold.

The Economist/Roz