What works: groundbreaking evaluation of climate policy measures over two decades
International research team co-led by MCC analyses 1,500 interventions in 41 countries. What appears to be crucial is the interaction of policies with price instruments.
Wind turbines in England: significant climate protection was achieved through a combination of minimum carbon price with subsidies for renewables and a coal phase-out plan. | Photo: Shutterstock/Jevanto
An international research team has now unveiled the first comprehensive global evaluation of climate policy measures over the last 20 years. Out of 1,500 policy interventions from 1998 to 2022, it identifies only 63 cases of successful climate policies that have led to significant emission reductions, which average 19 percent. The key characteristic of these successful cases is the inclusion of tax and price incentives in well-designed policy mixes. The study was led by the Berlin-based climate research institute MCC (Mercator Research Institute on Global Commons and Climate Change) and the Potsdam Institute for Climate Impact Research (PIK), in collaboration with the University of Oxford, the University of Victoria and the Organisation for Economic Co-operation and Development (OECD). It has been published in the renowned journal Science.
“We systematically evaluated policy measures that have rarely been studied until now, providing new insights into well-designed combinations of complementary policy instruments”, explains Nicolas Koch, head of the Policy Evaluation Lab at MCC and lead author of the study. “From this, we derive best practices – for the building, electricity, industry and transport sectors, and in both industrialised countries and often neglected developing countries. Our findings demonstrate that more policies do not necessarily equate to better outcomes. Instead, the right mix of measures is crucial. For example, subsidies or regulations alone are insufficient; only in combination with price-based instruments, such as carbon and energy taxes, can they deliver substantial emission reductions.”
The study highlights specific examples to illustrate this point. For instance, the researchers show that bans on coal-fired power plants or combustion engine cars do not result in major emission reductions when implemented alone; they are only successful when combined with tax or price incentives, as shown in the UK for coal-fired power generation or in Norway for cars.
This unprecedented analysis of policy interventions in 41 countries across six continents covers the entire spectrum of climate policy instruments, from energy-related building codes to purchase subsidies for climate-friendly products and carbon taxes. Using a new OECD database, which represents the most comprehensive inventory of climate policies worldwide to date, and an innovative approach combining machine learning methods with established statistical analyses, the team conducted a detailed impact evaluation of these policies, identifying those measures that achieved large-scale emission reductions.
“While it remains challenging to precisely disentangle the effects of individual measures within a policy mix, our 63 success cases provide systematic insights into effective policy combinations,” notes Annika Stechemesser from PIK, visiting researcher at MCC and also lead author of the study. “We show how well-designed policy mixes depend on sectors and on the development level of countries. This knowledge is vital for supporting policymakers and society in the transition to climate neutrality.”
These and other results of the study can be analysed interactively in the accompanying “Climate Policy Explorer” website. In the industrial sector, for example, China’s pilot emissions trading systems significantly reduced emissions after a few years, complemented by reduced fossil fuel subsidies and stronger financing incentives for energy efficiency. In the electricity sector, the UK achieved major emission reductions through a minimum carbon price, subsidies for renewable energy, and a coal phase-out plan. The US demonstrates an example of significant emission reductions in the transportation sector, resulting from a mix of tax incentives and subsidies for low-emitting vehicles and CO2 efficiency standards. Germany’s eco-tax reform starting in 1999 and truck toll introduction in 2005 are also notable success stories in the transport sector.
Further information
- The study: Stechemesser, A., Koch, N., Mark. E., Dilger, E., Klösel, P., Menicacci, L., Nachtigall, D., Pretis, F., Ritter, N., Schwarz, M., Vossen, H., Wenzel, A., 2024, Climate policies that achieved major emission reductions: Global evidence from two decades, Science
https://www.science.org/doi/10.1126/science.adl6547 - The interactive website “Climate Policy Explorer”: http://climate-policy-explorer.pik-potsdam.de/
