Designing an effective climate-policy mix: accounting for instrument synergy

Abstract

We assess evidence from theoretical-modelling, empirical and experimental studies

on how interactions between instruments of climate policy affect overall emissions

reduction. Such interactions take the form of negative, zero or positive synergistic

effects. The considered instruments comprise performance and technical standards,

carbon pricing, adoption subsidies, innovation support, and information provision.

Based on the findings, we formulate climate-policy packages that avoid negative

and employ positive synergies, and compare their strengths and weaknesses on

other criteria. We note that the international context of climate policy has been

neglected in assessments of policy mixes, and argue that transparency and

harmonization of national policies may be key to a politically feasible path to meet

global emission