Command-and-Control and Information instruments
10 min
Climate change policy instruments
For countries to achieve the objectives of the Paris Agreement and meet their nationally determined contributions (NDCs), they need policies that facilitate decarbonisation of their economies. There are two aspects to decarbonisation. The first one entails reducing the greenhouse gas emissions produced by the combustion of fossil fuels. This can be done by preventing emissions through the use of zero-carbon renewable energy sources and electrifying as many sectors as possible. The second one entails absorbing carbon from the atmosphere by capturing emissions and enhancing carbon storage in agricultural lands and forests.
A policy instrument is a tool or mechanism used by governments or other authorities to achieve specific policy objectives. These instruments can take various forms and may include regulations, taxes, subsidies, incentives, standards, information campaigns, etc. Each policy instrument is designed to influence behavior, resource allocation, or outcomes in a particular sector or area of concern. The choice of policy instrument depends on factors such as the nature of the problem, the desired outcome, economic considerations, political feasibility and admin capacity.
Policy instruments are broadly categorised into three main buckets.
Command and Control instruments (Regulations and Standards)
Information instruments
Economic instruments (price-based policies)
Carbon pricing (to discourage the use of fossil fuels)
Incentives (to encourage investments in clean energy)
