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Aligning Policies for a Low-carbon Economy

image of Aligning Policies for a Low-carbon Economy

This report produced in co-operation with the International Energy Agency (IEA), the International Transport Forum (ITF) and the Nuclear Energy Agency (NEA) identifies the misalignments between climate change objectives and policy and regulatory frameworks across a range of policy domains (investment, taxation, innovation and skills, trade, and adaptation) and activities at the heart of climate policy (electricity, urban mobility and rural land use).

Outside of countries’ core climate policies, many of the regulatory features of today’s economies have been built around the availability of fossil fuels and without any regard for the greenhouse gas emissions stemming from human activities. This report makes a diagnosis of these contradictions and points to means of solving them to support a more effective transition of all countries to a low-carbon economy.

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Delivering innovation and skills for the low-carbon transition

There is a wide range of policy instruments that drive innovation. Strong climate policies are essential to pull innovation in the right direction, but other instruments play a role, and may inadvertently hamper change. This chapter describes the trends in public research, development, and deployment (RDamp;), the incentives for private RDamp; and innovations, as well as the labour and capital attractiveness of innovative firms in different policy settings. It also touches on whether countries have the right set of skills for the low-carbon transition. Last, specific industries may face regulatory hurdles to innovate to lower their emissions, as illustrated by a case study on cement manufacturing.

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