How Should Support for Climate-Friendly Technologies Be Designed?

Stabilizing global greenhouse gas concentrations at levels to avoid significant climate risks will require massive "decarbonization" of all the major economies over the next few decades, in addition to the reduced emissions from other GHGs and carbon sequestration. Achieving the necessary scale of emissions reductions will require a multifaceted policy effort to support a broad array of technological and behavioral changes. Change on this scale will require sound, well-thought-out strategies. In this article, we outline some core principles, drawn from recent social science research, for guiding the design of clean technology policies, with a focus on energy. The market should be encouraged to make good choices: pricing carbon emissions and other environmental damage, removing distorting subsidies and barriers to competition, and supporting RD&D broadly. More specific policies are required to address particular market failures and barriers. For those technologies identified as being particularly desirable, some narrower RD&D policies are available.