Sustainability and Climate Risk (SCR) — Question 30

To achieve emissions reduction goals, a South American government considers policies other than carbon pricing to target carbon-intensive industries more effectively. The government intends to promote renewable power generation by implementing subsidies.
Which action should the government take to support this subsidy policy?

Answer options

• A. Launch renewable portfolio standards
• B. Create fuel efficiency standards
• C. Mandate CO2 emissions standards
• D. Establish feed-in tariffs

Correct answer: D

Explanation

The correct answer is D because establishing feed-in tariffs incentivizes the generation of renewable energy by guaranteeing fixed payments for energy produced, which aligns with the subsidy policy. Options A, B, and C do not directly support the subsidy for renewable energy, as they focus on standards and regulations that do not specifically promote renewable power generation.