Editing IPCC:AR6/WGIII/Chapter-13 (section)

=== 13.7.1 Policy Packages for Low-carbon Sustainable Transitions ===

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Since AR5 an emergent multidisciplinary literature on policy packages, or policy mixes, has emerged that examine how policies may be combined for sustainable low-carbon transitions ( [[#Rogge--2016|Rogge and Reichardt 2016]] ; [[#Kern--2019|Kern et al. 2019]] ). This literature covers various sectors including: energy ( [[#Rogge--2017|Rogge et al. 2017]] ); transport ( [[#Givoni--2013|Givoni et al. 2013]] ); industry ( [[#Scordato--2018|Scordato et al. 2018]] ); agri-food ( [[#Kalfagianni--2017|Kalfagianni and Kuik 2017]] ); and forestry ( [[#Scullion--2016|Scullion et al. 2016]] ).

A central theme in the literature is that transitions require policy interventions to address system level changes, thereby going beyond addressing market failures in two ways. First, structural system changes are needed for low-carbon transitions, including building low-carbon infrastructure (or example aligning electricity grids and storage with the requirements of new low-carbon technology), and adjusting existing institutions to low-carbon solutions (for example by reforming electricity market design) ( [[#Bak--2017|Bak et al. 2017]] ; [[#Patt--2018|Patt and Lilliestam 2018]] ). Second, explicit transformational system changes are necessary, including efforts at directing transformations, such as clear direction setting through the elaboration of shared visions, and coordination across diverse actors across different policy fields, such as climate and industrial policy, and across governance levels ( [[#Uyarra--2016|Uyarra et al. 2016]] ; [[#Nemet--2017|Nemet et al. 2017]] ).

There are some specific suggestions for policy packages: Van den Bergh et al. (2021) suggest that innovation support and information provision combined with a carbon tax or market, or adoption subsidy leads to both effective and efficient outcomes. Others question the viability of universally applicable policy packages, and suggest packages need to be tailored to local objectives ( [[#del%20Río--2014|del Río 2014]] ) Consequently, much of the literature focuses on broad principles for design of policy packages and mixes, as discussed below.

Comprehensiveness, balance and consistency are important criteria for policy packages or mixes ( ''robust evidence'' , ''high agreement'' ) ( [[#Rogge--2016|Rogge and Reichardt 2016]] ; [[#Scobie--2016|Scobie 2016]] ; [[#Carter--2018|Carter et al. 2018]] ; [[#Santos-lacueva--2018|Santos-lacueva and González 2018]] ). Comprehensiveness assesses the extensiveness of policy packages, including the breadth of system and market failures it addresses ( [[#Rogge--2016|Rogge and Reichardt 2016]] ). For example, instrument mixes that include only moderate carbon pricing, but are complemented by policies supporting new low-carbon technologies and a moratorium on coal-fired power plants may not only be politically more feasible than stringent carbon pricing alone, but may also limit efficiency losses and lower distributional impacts ( [[#Bertram--2015b|Bertram et al. 2015b]] ). Balance captures whether policy instruments are deployed in complementary ways given their different purposes, combining for example technology-push approaches such as public R&amp;D with demand-pull approaches such as an energy tax. A combination of technology-push and demand-pull approaches has been shown to support innovation in energy efficient technologies in OECD countries ( [[#Costantini--2017|Costantini et al. 2017]] ). Consistency addresses the alignment of policy instruments among each other and with the policy strategy, which may have multiple and not always consistent objectives ( [[#Rogge--2019|Rogge 2019]] ). Consistency of policy mixes has been identified as an important driver of low-carbon transformation, particularly for renewable energy ( [[#Lieu--2018|Lieu et al. 2018]] ; [[#Rogge--2018|Rogge and Schleich 2018]] ). Box 13.14 summarises the economics literature on how policies interact, to inform design of packages.

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