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Non-price policies for addressing climate change: challenges in assessing the performance of policy packages for Ministries of Finance and economic decision-makers

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Institution
Centre for Social and Economic Progress (CSEP)
Author(s)
Renu Kohli
Published
Topic Area
The economic and fiscal impacts the green transition
Question
What measures can drive the green transition and climate mitigation?
Citation

 Centre for Social and Economic Progress (2025) Non-price policies for addressing climate change: challenges in assessing the performance of policy packages for Ministries of Finance and economic decision-makers, Contribution to ‘Compendium of Practice from a Global Community of Ministries of Finance and Leading Organizations’, Coalition of Finance Ministers for Climate Action

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In G20 countries, non-price policy levers across different sectors, serving multiple and overlapping objectives and often aligned to climate action targets, are combined with implicit carbon pricing measures such as fiscal and other financial incentives as part of the overall climate policy framework.

In 2023, the CSEP compiled and assessed the range of non-price policies instituted across these countries. This mapping uncovered substantial heterogeneities and complex interlinkages across sectors, tools, and policy objectives, and highlighted substantial variation in sequencing patterns as well as the stringency of non-price levers.

Key Messages

  • Common non-price levers include greenhouse gas reduction targets, R&D support, grants, subsidies, other financial incentives for green projects, emissions disclosure norms and standards, green infrastructure development, information, and education, including voluntary approaches. Non-pricing tools are often implicit pricing tools that push up costs.
  • Non-price decarbonization mechanisms are crucial in establishing preconditions for more stringent and explicit carbon pricing at later stages.
  • A comparative evaluation of non-price levers’ relative efficacy and efficiency and quantification for equivalence requires a careful stocktaking and mapping of the countries’ respective emissions bases. Moreover, crosscountry and policy-type differences can make it difficult to assess their sufficiency to meet net zero goals.

It is widely recognized that price and non-price emission reduction policies are complementary, and there is considerable support for a mix or balance of policy levers.

Keywords
carbon pricingmitigationnon-pricing policypolicy mix