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Fossil Fuels
…in their normal operations. Major oil- and gas-producing countries can add commitments to reduce methane emissions to their nationally determined contributions. Government and industry should not delay action: the lack of a baseline should not preclude the introduction of abatement goals and policies to prevent methane leakage and flaring. Non-emergency flaring and venting should be prohibited, and fiscal or contractual terms should clarify responsibilities for ensuring the productive use of associated gases and their ownership. Many alternatives to flaring and venting are available to companies, including reinjection, on-site use and new market opportunities. Regulations need to address…
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Energy Efficiency and Demand
Energy Efficiency and Demand
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Electricity
…the regulation of plant emissions can encourage coal-to-gas switching and provide an important long-term investment signal for low-emission technologies.
Shift policy to competitive auctions
Auctions for the centralised competitive procurement of renewables have become increasingly widespread in recent years and have been instrumental in discovering renewable energy prices and containing policy costs in many countries, especially for solar PV and wind. The success of such policies in achieving deployment and development objectives relies on their design and consequent ability to attract investment and competition.
Adapt market designs and policies to support variable renewables and increase…
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Low-Emissions Fuels
…of both biofuels and hydrogen, while avoiding potentially harmful environmental, economic and social impacts. The development of international markets and trade in these fuels will also depend on internationally agreed methods and certification processes to guarantee the sustainability of traded fuels.
Create support programmes for the use of low-emissions fuels
With the use of low-emissions fuels still in most cases being more expensive than unabated fossil fuels, policy measures will be needed to close this cost gap and support the use of low-emissions fuels. Policy instruments can include penalties for unabated fossil fuels, such as CO2 prices…
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Renewables
Ensure renewable energy policy stability and predictability
For all renewable power and heat technologies, long-term targets and policy stability are essential to ensure investor confidence and continued growth. At the same time, policies need to adapt continuously to changing market conditions to achieve greater cost-competitiveness and to improve the integration of renewables into the energy system.
Focus on an energy system perspective
Achieving a high penetration of renewable power and heat technologies is a necessary condition to decarbonise many carbon-intensive sectors of the economy, including heavy industry, construction and transport. The expansion of renewable hydrogen use, emissions…
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Industry
…or rebalanced.
Create a market for near zero-emission industrial products to incentivise uptake of innovative production processes, and develop supporting infrastructure
Creating demand for near zero-emission materials allows firms to be confident that if they invest in near zero-emission production technologies, there will be a buyer for their products. In the near term, time-limited demand creation for low-emission materials – which achieve substantial emission reductions but are not yet at near zero-emissions – can be an important step to catalyse the transition.Initial policies should guarantee long-term support for early market entrants – examples include carbon…
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Buildings
…makers should also introduce and strengthen product standards to accelerate the shift towards best-in-class appliances and equipment.
Set clear and measurable targets to drive the market transformation towards high-performing buildings
Setting mandatory targets towards zero-carbon-ready buildings fosters market growth and facilitates long-term investment decisions. Targets can include renewable penetration quota, fossil fuel bans, and target renovation rates to foster market growth and facilitate long-term investment decisions.
Stimulate financing and market mechanisms to increase the affordability of best-in-class products
Financing and market mechanisms are needed to accelerate the clean energy transition…
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Transport
Plan for compact urban development with improved public transport and infrastructure for micromobility and active travel
More than half of the world’s population lives in cities. With urbanisation on the rise, urban governance should encompass transport strategies that can induce modal shift towards low-emission transport in order to get in step with the NZE Scenario. The resurgence in active modes of transport during and following the pandemic has provided governments with a policy window to improve and expand infrastructure (e.g. bicycle lanes and car-free zones) and make road re-allocation measures permanent. Transit-oriented development that…
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Carbon Capture Utilisation and Storage
Co-ordinate and promote the development of CCUS hubs and shared networks
CCUS hubs can spread infrastructure costs between emitters and generate economies of scale to reach emitters that are smaller-scale or further away from identified CO2 storage sites. Governments can have a key role in the development of hubs by: Co-ordinating hub development through competitive solicitations that encourage collaboration across multiple sectors (e.g. industrial emitters, power plants). Efforts are already underway in Canada, the United States, and the United Kingdom. Ensuring legal and regulatory frameworks are designed to account for shared infrastructure networks that allow for non-discriminatory open access…