Rapid demographic and economic growth, and the resulting increase in energy and transport demands, are the main factors underlying an increase in greenhouse gas (GHG) emissions. While emissions of air pollutants have declined, air pollution hotspots remain at industrial sites and in major urban areas. The adoption of the Clean Air Law and of a national plan for reducing GHG emissions by 20% by 2020 represent major steps towards addressing these challenges. This chapter reviews these policy initiatives, the institutional framework and the mechanisms in place to monitor implementation. The energy and transport sectors are the major sources of emissions of GHG and air pollutants. The chapter assesses the policy measures implemented in these sectors, including those to promote renewables, energy efficiency and transport modes other than road transport. The opportunity of introducing economy-wide policy instruments such as a carbon tax is also discussed.