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Table 1

Two Categories of Climate Policies

Hard Climate PoliciesSoft Climate Policies
Regulatory instruments and economic instruments with negative incentives. Costs are more visible (directly borne by firms and individuals). Economic instruments focusing on positive incentives, public investments, organization, informational and voluntary instruments. Costs are less visible (mainly paid through the general budget). 
  • Taxes and tradable permit schemes

  • User charges

  • Codes and standards (building codes and product standards, sectoral standards, vehicle fuel-economy and emissions standards)

  • Obligation schemes and other mandatory requirements

  • Mandatory auditing and monitoring schemes

 
  • Direct investments, grants and subsidies, loans, tax relief

  • Policy development and reform (policy support, including institutional creation and strategic planning)

  • Research, development, and deployment (RD&D) (including demonstration projects, research programs for technology deployment and diffusion and for technology development)

  • Information and education (including advice/aid in implementation, information provision, performance labels, professional training and qualification)

  • Voluntary approaches (negotiated agreements between public–private sector, public voluntary schemes, unilateral commitments by private sector)

 
Hard Climate PoliciesSoft Climate Policies
Regulatory instruments and economic instruments with negative incentives. Costs are more visible (directly borne by firms and individuals). Economic instruments focusing on positive incentives, public investments, organization, informational and voluntary instruments. Costs are less visible (mainly paid through the general budget). 
  • Taxes and tradable permit schemes

  • User charges

  • Codes and standards (building codes and product standards, sectoral standards, vehicle fuel-economy and emissions standards)

  • Obligation schemes and other mandatory requirements

  • Mandatory auditing and monitoring schemes

 
  • Direct investments, grants and subsidies, loans, tax relief

  • Policy development and reform (policy support, including institutional creation and strategic planning)

  • Research, development, and deployment (RD&D) (including demonstration projects, research programs for technology deployment and diffusion and for technology development)

  • Information and education (including advice/aid in implementation, information provision, performance labels, professional training and qualification)

  • Voluntary approaches (negotiated agreements between public–private sector, public voluntary schemes, unilateral commitments by private sector)

 

Source: Author’s elaboration based on IEA (2020).

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