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Cambridge Centre for Environment, Energy and Natural Resource Governance

One of the obstacles to reaching net zero targets is that the costs of decarbonization policies often fall on those least able to bear them. This means there can be public resistance to change. But in a new study published today in Nature Climate Change, C-EENRG fellows and Cambridge academics Dr Cristina Peñasco and Prof Laura Díaz Anadón, and Prof Elena Verdolini of the RFF-CMCC European institute on Economics and the Environments (EIEE), the Euro-Mediterranean Centre on Climate Change and the University of Brescia, show that with the adequate design, policies for a green recovery can boost the competitiveness of SMEs and avoid penalizing low-income households.

In the paper Systematic review of the outcomes and trade-offs of ten types of decarbonization policy instruments, authors develop and implement a framework to systematically review and synthesize the impact of ten types of decarbonization policy instruments on seven technical and socioeconomic outcomes. The systematic review shows that the selected types of regulatory, economic and financial instruments are generally associated with positive impacts on environmental, technological and innovation outcomes. Several instruments are often associated with short-term negative impacts on competitiveness and distributional outcomes. Authors discuss how these trade-offs can be reduced or transformed into co-benefits by designing research and development and government procurement, deployment policies, carbon pricing and trading. They show how specific design features can promote competitiveness and reduce negative distributional impacts, particularly for small firms. An online interactive Decarbonisation Policy Evaluation Tool allows further analysis of the evidence.

This research was funded by the EU project INNOPATHS.

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More about the study in the University of Cambridge press release

Read the article: Peñasco, C., Anadón, L.D. & Verdolini, E. (2021). Systematic review of the outcomes and trade-offs of ten types of decarbonization policy instruments. Nature Climate Change.

Access Decarbonisation Policy Evaluation Tool