Context factors enabling effective sectoral climate policies
Instrumentalists rely on liberal market structure and mature financial markets for economic and regulatory instruments. Economies leveraging existing financial markets, taxation and regulatory instruments for streamlined and efficient renewable energy deployment.
Central Policy Strategy:
Strategies center on utilizing advanced policy instruments, such as renewable portfolio standards (RPS), renewable certificates and tax credits for producers enabled by a liberal market structure and advanced financial markets.
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Policy examples:
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California (2002): California Renewables Portfolio Standard
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USA (2006): Investment Tax Credit (ITC)
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UK (2002): Renewables Obligation (RO)
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UK (2010): Feed-in Tariffs (FIT)
Economies employing long-term, carefully planned policy incentives and investments to enhance renewable energy uptake through coordinated stakeholder collaboration and institutional capacity building. The approach is horizontal and multipronged, with an emphasis on institutional capacity.
Central Policy Strategy:
Policies feature a balanced approach that utilizes a combination of subsidies, R&D investments, and coordinated policy interventions. Enabled by interest group support, distributional effects, and robust fiscal strategies.
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Policy examples:
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Germany (2000): Erneuerbare-Energien-Gesetz (Renewable Energy Sources Act)
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Philippines (2008): Renewable Energy Act
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Portugal (2001): Energy Efficiency and Endogenous Energies (E4)
Political systems with substantial sub-national control, focusing on empowering regional actors and fostering localized renewable energy solutions.
Central Policy Strategy:
Policy approach emphasizes local decision-making with regional subsidies, localized grid integration, and community-based energy projects. Supports renewable deployment through regional regulatory autonomy and tailored energy initiatives.
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Policy examples:
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Scotland (2009): Climate Change (Scotland) Act
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Sweden (2003): Electricity Certificate System
Centrally planned or coordinated economies employing a top-down framework to drive renewable deployment through consolidated planning and state-backed investment, often led by public sectors.
Central Policy Strategy:
Features strong government-led initiatives, involving direct state ownership of energy assets, extensive use of public sector utilities, and integrated multi-year planning for renewable targets. Utilizes government-linked financial institutions to mobilize funding.
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Policy examples:
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China (2006): Renewable Energy Law
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China (2013): Feed-in tariff support for solar PV
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Vietnam (2015): Renewable Energy Development Strategy
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South Korea (2012): Renewable Portfolio Standards (RPS)
Emerging markets employing flexible and innovative policy tools to implement renewable energy solutions while prioritizing cost reduction and overcoming limited institutional frameworks.
Central Policy Strategy: Employs auction-based renewable energy tenders, risk-sharing mechanisms, and ad-hoc policy experimentation. Prioritizes minimizing costs through competitive bidding processes and leveraging partnerships to offset institutional limitations.
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Policy examples:
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Chile (2008): Non-Conventional Renewable Energy Law
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India (2008): National Action Plan for Climate Change, India (2010): Jawaharlal Nehru National Solar Mission
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South Africa (2011): Renewable Energy Independent Power Producer Procurement Program
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Brazil (2002): PROINFA, Brazil (2009): National Climate Change Policy
Special cases where financial sector expertise predominantly drives renewable energy investment through structured capital flow, risk mitigation, and cost efficiency.
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Central Policy Strategy:
Relies heavily on financial intermediaries, such as national development banks, to structure capital flows. Employs risk mitigation instruments like guarantees, transnational financial partnerships, and green finance to reduce capital costs for renewable projects.
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Developed economies with a high share of coal in their energy mix and strong commitments to international climate goals.
Central Policy Strategy:
Policy pledges are driven by environmental impact and proactive climate goals, with institutional capacity strengthened through stakeholder commissions.
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Policy examples:
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Germany (2020): Coal Exit Law (Kohleausstiegsgesetz)
Liberalized market, in which the already low share of coal declined further due to its substitutability with gas.
Central Policy Strategy:
Rather weak opposition to phase-out has facilitated the pledge, driven by environmental concerns, social activism, and a focus on international reputation.
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Policy examples:
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UK (2015): UK Coal Phase-Out Commitment
Emerging economy with limited financial capacity for new coal power plants, making external funding crucial for transitioning away from coal.
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Central Policy Strategy:
International financial support is the primary enabler of the coal phase-out pledge, further supported by environmental impact concerns.
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Regions with a high share of EV sales combined with the absence of a strong conventional automotive industry and a high renewable share in the electricity-mix.
Central Policy Strategy:Enabled by the absence of a strong opposition and the presence of support coalitions and skill spillovers, policies include robust ZEV deployment strategies, such as ICEV sales bans, driven by emission reduction and economic growth opportunities.
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Policy examples:
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Quebec, CA (1973): EV Working Group; Quebec, CA (2012): Roulez Verte Program
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California, USA (1990): Low Emission Vehicle Program; California, USA (2012): Advanced Clean Cars I
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Norway (1990): EV Registration Tax Exemption; Norway (2009):Transnova Program
Planned economy, characterized by the world’s highest absolute EV sales and a strong conventional automotive industry.
Central Policy Strategy:
Driven by energy security, pollution concerns, and economic opportunities. Policies focus on subsidies, R&D, and non-financial demand-side incentives, including exemption from license plate lotteries.
Policy examples:
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China (2009): Ten Cities, One Thousand Vehicles Project
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China (2017): New Energy Vehicle (NEV) Mandate
Developed Economy with early but limited EV adoption.
Central Policy Strategy:
Initial success driven by extraordinary funding, strong public acceptance, and renewable energy integration.
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Policy examples:
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Estonia (2011): EV Pilot Programme "ELMO"
Motivation
In-use cost savings, status
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System variables​
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Availability of (affordable) electric vehicles, including different models and varieties
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Financial incentives such as subsidies or tax exemptions
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Sufficient EV charging infrastructure (e.g. charging lanes)
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Entries
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Product/technology/service standards: standardize electric-vehicle technologies and production to enhance market access for companies
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Infrastructure improvements + urban/landscape design: requiring fuel stations to develop EV charging infrastructure (e.g. standards for charging specifications/number of spots)
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Taxes/fees: higher gasoline taxes or higher road taxes for fossil-fuel based vehicles
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Nudging: informing potential buyers of vehicles about the running costs of different technologies and their environmental impact (Filippini et al., 2021)
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Additional references
Akenji, L., Bengtsson, M., & Salem, J. (2015)
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Related lifestyle scenario (Van den Berg, 2023)
Designed World​​
Motivation
Trendy, cost-effective
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System variables​
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Influencers
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Social media
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Marketing to encourage sustainable driving habits
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Entries
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Regulating behaviour (by law): reduce speed limits (Chakraborty et al., 2023) or introduce dynamic speed limits
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Taxes/fees: higher gasoline taxes or higher road taxes for less efficient vehicles
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Nudging:
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eco-labelling
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informing potential buyers of vehicles about the running costs of different technologies and their environmental impact (Filippini et al., 2021)
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feedback on driving patterns through apps that use in-vehicle recorded data (e.g. offered by insurance companies)
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Additional references
Akenji, L., Bengtsson, M., & Salem, J. (2015)
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Related lifestyle scenario (Van den Berg, 2023)
Pocket Lifestyles​
Motivation
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Convenience
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Environmentally-conscious
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System variables​
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Availability and convenience and options of service providers (e.g. Uber, Lift)
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Urban density (i.e. higher demand for services can reduce operational costs)
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Level of trust and (perceived) security/safety
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Entries
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Product/technology/service standards: monitoring of the provided service can increase reliability and trust (but can also introduce unwanted barriers for market access)
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Stimulating innovation: stimulating self-driving cars​
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Related lifestyle scenario (Van den Berg, 2023)
Designed World​​
Motivation
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Convenience
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Environmentally-conscious
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System variables​
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Social norm changes away from ownership
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Availability of service providers that provide sharing options (e.g. Sixt Share)
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Availability of easy and effective booking, parking and returning schemes
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Urban density:
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How necessary is access to a car? Availability may be limited when demand for trips is high.
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Limited space in densely populated areas can make private car ownership more challenging and costly.
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​Regulatory environment (e.g. who is liable for damages/stains)
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Cultural attitude towards car ownership
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Potential lack of flexibility, reliability and maintenance
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Entries
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Stimulating innovation: simulating intelligent use of ICT
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Infrastructure improvements + urban/landscape design: dedicated parking spots for shared cars​
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Additional references
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Related lifestyle scenario (Van den Berg, 2023)
Global Commons​
Motivation
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Environmentally-conscious
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Social cohesion
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System variables​
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Availability of carpooling platforms (e.g. Bla Bla Car) and number of active users
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Availability of high-occupancy vehicle (HOV) lanes
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Financial incentives such as road pricing
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Level of trust, (perceived) security/safety and feeling comfortable with strangers
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Entries
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Stimulating innovation: stimulating development of carpooling apps (e.g. real-time ride-matching platforms)
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Partnerships between government, municipalities and the business sector: employer-sponsored programs
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Infrastructure improvements + urban/landscape design: HOV lanes; dedicated carpool pick-up places
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Taxes/fees:
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congestion pricing
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parking fees
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fuel taxes
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road pricing​​
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Related lifestyle scenario (Van den Berg, 2023)
Big Village​
Motivation
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Trendy
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Tech-savvy
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System variables​
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Availability of platforms for shared car ownership or renting out own car (e.g. Snapp-car)
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Level of trust and (perceived) security/safety
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People’s reluctance to share, especially when they already own a car
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Urban density:
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How necessary is access to a car? Availability may be limited when demand for trips is high.
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Limited space in densely populated areas can make private car ownership more challenging and costly.
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Regulatory environment (e.g. who is liable for damages/stains)
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Entries
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Stimulating innovation: simulating intelligent use of ICT
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Additional references
​
Related lifestyle scenario (Van den Berg, 2023)
Pocket Lifestyles​
Developed economies with a high share of coal in their energy mix and strong commitments to international climate goals.
Central Policy Strategy:
Policy pledges are driven by environmental impact and proactive climate goals, with institutional capacity strengthened through stakeholder commissions.
​
Policy examples:
-
Germany (2020): Coal Exit Law (Kohleausstiegsgesetz)
Liberalized market, in which the already low share of coal declined further due to its substitutability with gas.
Central Policy Strategy:
Rather weak opposition to phase-out has facilitated the pledge, driven by environmental concerns, social activism, and a focus on international reputation.
​
Policy examples:
-
UK (2015): UK Coal Phase-Out Commitment
Emerging economy with limited financial capacity for new coal power plants, making external funding crucial for transitioning away from coal.
​
Central Policy Strategy:
International financial support is the primary enabler of the coal phase-out pledge, further supported by environmental impact concerns.
​​
Emerging economy with limited financial capacity for new coal power plants, making external funding crucial for transitioning away from coal.
​
Central Policy Strategy:
International financial support is the primary enabler of the coal phase-out pledge, further supported by environmental impact concerns.
​​
Regions with a high share of EV sales combined with the absence of a strong conventional automotive industry and a high renewable share in the electricity-mix.
Central Policy Strategy:Enabled by the absence of a strong opposition and the presence of support coalitions and skill spillovers, policies include robust ZEV deployment strategies, such as ICEV sales bans, driven by emission reduction and economic growth opportunities.
​
Policy examples:
-
Quebec, CA (1973): EV Working Group; Quebec, CA (2012): Roulez Verte Program
-
California, USA (1990): Low Emission Vehicle Program; California, USA (2012): Advanced Clean Cars I
-
Norway (1990): EV Registration Tax Exemption; Norway (2009):Transnova Program
Planned economy, characterized by the world’s highest absolute EV sales and a strong conventional automotive industry.
Central Policy Strategy:
Driven by energy security, pollution concerns, and economic opportunities. Policies focus on subsidies, R&D, and non-financial demand-side incentives, including exemption from license plate lotteries.
Policy examples:
-
China (2009): Ten Cities, One Thousand Vehicles Project
-
China (2017): New Energy Vehicle (NEV) Mandate
Developed Economy with early but limited EV adoption.
Central Policy Strategy:
Initial success driven by extraordinary funding, strong public acceptance, and renewable energy integration.
​
Policy examples:
-
Estonia (2011): EV Pilot Programme "ELMO"
Planned economy, characterized by the world’s highest absolute EV sales and a strong conventional automotive industry.
Central Policy Strategy:
Driven by energy security, pollution concerns, and economic opportunities. Policies focus on subsidies, R&D, and non-financial demand-side incentives, including exemption from license plate lotteries.
Policy examples:
-
China (2009): Ten Cities, One Thousand Vehicles Project
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China (2017): New Energy Vehicle (NEV) Mandate