The Policy Toolkit
Four pathways to drive climate action—each with distinct strengths and tradeoffs
Your Progress
Section 2 of 5Choosing the Right Tool for the Job
No single policy solves climate change. Effective climate governance uses a portfolio approach: multiple instruments working together across sectors and scales.
🔧 Policy Instrument Comparison Tool
💰
Carbon Pricing
Market-Based
Put a price on emissions via tax or cap-and-trade
Effectiveness
9/10
Efficiency
10/10
Equity
5/10
Feasibility
6/10
Real-World Examples:
EU ETSCanada Carbon TaxCalifornia Cap-and-Trade
Policy Mix Strategies
In practice, governments combine instruments to address different market failures, political constraints, and equity concerns:
🏭 Industrial Decarbonization
- Carbon pricing for broad incentive
- Performance standards for best practices
- R&D subsidies for breakthrough tech
- Trade policy to prevent leakage
🚗 Transport Transformation
- Fuel taxes for vehicle use
- EV mandates for manufacturers
- Purchase incentives for consumers
- Infrastructure investment for charging
⚡ Clean Energy Transition
- Renewable portfolio standards for utilities
- Feed-in tariffs for project economics
- Grid regulations for integration
- Coal phase-out for system shift
🏡 Building Efficiency
- Building codes for new construction
- Retrofit subsidies for existing stock
- Appliance standards for equipment
- Disclosure requirements for transparency
💡 Design Principle: Complementarity
The best policy mixes are complementary, not redundant. Carbon pricing sets the baseline incentive. Standards ensure minimum performance. Subsidies overcome capital barriers. Regulation addresses market failures pricing can't fix. Each tool targets a distinct barrier to climate action.