An evaluation of more than 1,500 climate policies in 41 countries found that only 63 actually worked to reduce greenhouse gas emissions.
Subsidies and regulations—policy types often favored by governments—rarely worked to reduce emissions, the study found, unless they were combined with price-based strategies aimed at changing consumer and corporate behavior.
“The commonality in those successful cases is where we see subsidies and regulations being combined with price-based policy instruments,” said Nicolas Koch, senior researcher at the Berlin-based Mercator Research Institute on Global Commons and Climate Change and an author of the study. “This means carbon pricing, and it could be energy taxes, it could be vehicle taxes.”
The study, published today in the journal Science, used an AI algorithm to sift through a database of environmental prescriptions compiled by the Organization for Economic Cooperation and Development, a Paris-based economic agency, between 1998 and 2020. These policies ranged from energy-efficient standards for household appliances to a carbon tax on fossil fuels like oil and gas.
The fraction of policies that worked combined financial incentives, regulations and taxes, according to the study.
The authors evaluated policies adopted by each nation’s electricity, transportation, building and industrial sectors. They programmed the algorithm to cross-reference each policy with subsequent changes in greenhouse gas emissions from each country.
Climate experts said the study is a good road map for which policies work and can be updated to include data from the 2022 Inflation Reduction Act, which is doling out an estimated $428 billion in subsidies, incentives and tax credits for climate-related projects.
“This study gives me confidence that we know what to do and how to do it,” said Julio Friedmann, chief scientist at Carbon Direct, a New York-based carbon management firm, who wasn’t involved in the study.
In 2015, more than 190 nations signed the Paris agreement, pledging to limit global warming to 1.5 degrees Celsius above preindustrial levels to avoid the worst effects of climate change. As part of the treaty, nations are required to document how they will achieve emissions reductions.
By searching through the OECD database, which identifies 46 types of policy interventions, the study’s authors found government policymakers prefer subsidies and regulations, according to Koch.
“We see a lot of policy packages built around these two policy types, and we find that it’s very rare that they really work in reducing emissions,” Koch said.
The study found the nations’ overall climate emissions will exceed the Paris target by 23 billion metric tons of CO2 by 2030.
The 63 successful policy interventions in total reduced emissions between 0.6 billion and 1.8 billion metric tons of CO2. The most successful of the policies included a mixture of policy tools to change consumer and corporate behavior.
In the U.S., emissions from vehicles dropped 8% from 2008 to 2010 after new mileage rules were put into effect in 2007 along with a tax break for motorists who bought cleaner cars in 2006, Koch said.
The results were sobering: Across four sectors, 41 countries, two decades and 1,500 policies, only 63 successful policy interventions with large effects were identified, which reduced total emissions between 0.6 and 1.8 Gt CO2.
However, the authors say the good news is that policymakers can learn from the 63 effective cases where climate policies had led to meaningful reductions to get back on track.
The researchers have made the data available to policy-makers across the world, and have produced a sector by sector, country by country data visualisation in a dashboard.
Overall, the Team concluded:
- Climate policies are more effective as part of a mix: In most cases, effect sizes of climate policies are larger if a policy instrument is part of a policy mix rather than implemented alone –for example combining carbon pricing with a subsidy.
- Developed and developing countries have different climate policy needs: In developed countries, carbon pricing stands out as an effective policy, whereas in developing countries, regulation is the most powerful policy.
- The Paris emissions gap can be closed: Focusing on the 63 cases of effective climate policies would close the current emissions gap to meet the Paris Targets by 26% -41%, a significant contribution.
Dr Anupama Sen, Head of Policy Engagement at the Oxford Smith School of Enterprise and the Environment said: ‘In more than 80% of investments the total lifetime cost of a clean technology is considerably lower than that of a fossil technology. While the new UK government’s policies are moving in the right direction, they need to go further and faster to unlock these lower costs. New Oxford research now provides evidence that an optimal mix of policies can achieve this, and rapidly lower a country’s emissions.’
“searching through the OECD database… the study’s authors found government policymakers prefer subsidies and regulations” The authors preferred climate action, a carbon market, is politically impossible, except in rare instances. That’s because a carbon market is restricting voters choices, and those voters promptly reward the politican who implemented the market by tossing them from office (especially after the fossil fuel industry inflames the issue into ‘communism!’). It’s much easier for politicians to offer voters new options: you can still buy that Hummer, but now it comes in ‘electric version’ too! Hence subsidies.
The Wall Street Journal has spent the last 30 years denying that climate change even existed. What are the odds that they would broadcast a study suggesting the ‘best’ method of climate action is one the WSJ knows has no political chance of ever being implemented? I think WSJ knows who its owners are working for: the fossil fuel industry.