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You are here: Home / Environmental topics / Climate change / FAQ / How can governments create incentives for mitigation?

How can governments create incentives for mitigation?

What are the implications of different policy instruments? How is climate change mitigation linked to sustainable development?

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Implications of different policy instruments

A wide variety of policy tools can be applied by governments to create incentives for mitigation action, such as regulation, taxation, tradable permit schemes, subsidies, and voluntary agreements. Past experience shows that there are advantages and drawbacks for any given policy instrument. For instance, while regulations and standards can provide some certainty about emission levels, they may not encourage innovations and more advanced technologies. Taxes and charges, however, can provide incentives, but cannot guarantee a particular level of emissions. It is important to consider the environmental impacts of policies and instruments, their cost effectiveness, institutional feasibility and how costs and benefits are distributed.

Although the impact of the Kyoto protocol’s first commitment period 2008-2012 on global carbon emissions is expected to be limited, it has allowed the establishment of a global response to the climate problem as well as the creation of an international carbon market and other mechanisms that may provide the foundation for future mitigation efforts.

Links between climate change mitigation and sustainable development

Switching to more sustainable development paths can make a major contribution to climate change mitigation. Policies that contribute to both climate change mitigation and sustainable development include those related to energy efficiency, renewable energies, and conservation of natural habitats. In general, sustainable development can increase the capacity for adaptation and mitigation, and reduce vulnerability to the impacts of climate change.

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