To curb global warming and achieve the goals of the Paris Agreement, significant reductions in emissions are imperative. Governments around the world must take the lead, but they need clear insights into which policies deliver results. Unfortunately, evidence on the effectiveness of climate policies is patchy at best. While a few prominent policies have been extensively studied, many others remain under-evaluated or overlooked. A pioneering study published in Science, led by the Potsdam Institute for Climate Impact Research (PIK) in collaboration with researchers from the University of Oxford, the University of Victoria, and the OECD, offers novel insights. This is the first comprehensive global evaluation of climate policy measures, analysing over 1,500 policy interventions across four sectors from 1998 to 2022 in 41 countries across six continents.
The study uses climate policy data from the Climate Actions and Policies Measurement Framework (CAPMF), the OECD’s climate mitigation policy database developed under its International Programme for Action on Climate (IPAC), which captures a broad spectrum of different policy instruments. Combining the policy data with a sophisticated machine learning method, the study identified 63 successful climate policies that drove substantial emission reductions. These insights offer invaluable guidance for policymakers striving to bend the emissions curve.
There is no one-size-fits-all strategy when it comes to climate policy
A key finding of the study is that there is no universal recipe for reducing emissions. Successful climate policies and policy combinations vary heavily across sectors and between developed and developing countries (see Figure 1 below). This discrepancy reflects the fact that emissions profiles and starting conditions differ substantially across sectors and countries.
For example, carbon pricing has proven particularly effective in the electricity and industry sectors, both of which are sectors where profit-maximising firms are mostly responsible for emissions. For the buildings and transport sectors—where households play a central role—a more intricate mix of policies seems to be critical often including non-market-based instruments such as regulations and information instruments.
While carbon pricing, regulation, and subsidies tend to work well in developed countries, carbon pricing has not always delivered in developing countries. For example, carbon pricing has not consistently led to emissions reductions in the electricity sector in developing countries, partially because price levels were too low.
Figure 1. Effective policies and policy mixes
Note: The diagram shows which combinations of policy instrument types are effective in each sector separately for developed and developing economies. For each circle’s area, the percentage indicates what share of successful interventions in this sector was made up by a specific individual policy type or a specific combination.
Source: Stechemesser et al (2024): Climate policies that achieved major emission reductions: Global evidence from two decades
Policy mixes are more effective in reducing emissions than stand-alone policies
Another key takeaway from the study is that policy mixes outperform stand-alone measures. In fact, 70% of successful interventions involved two or more policies working in tandem. A striking example is observed in the United Kingdom’s electricity sector, which saw emissions plummet in the mid-2010s. The carbon price floor (CPF), which set a minimum carbon price for power producers in the EU Emissions Trading System, was initially credited with this success. However, this study reveals that the CPF was part of a broader policy mix, including various instruments such as renewable portfolio standards, stricter air pollution controls, feed-in tariffs, and auctions. Together, these measures formed a robust policy mix that drove transformational change and effectively reduced emissions.
More work is needed with the OECD on the forefront of climate policy evaluation
This study marks a critical first step toward comprehensive climate policy evaluation; however, further work remains essential. The OECD is at the forefront of this effort, advancing two key initiatives. First, it is broadening the CAPMF’s policy and geographic coverage to better capture the diversity of countries and their policy approaches. Second, under the Inclusive Forum on Carbon Mitigation Approaches, the OECD is employing economic modelling to provide governments with insights regarding the effectiveness of their climate policy efforts. Both initiatives promise to deliver evidence-based recommendations to enable better climate policies for better lives.
Further reading
- Read the study
- Watch the replay of the related COP29 Virtual Pavilion session
- Explore the climate policy data
- Visit the website and dashboard of the International Programme for Action on Climate (IPAC).
