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Companies’ perceptions of credibility of low carbon policy mixes

A new paper written by Centre on Innovation and Energy Demand (CIED) researcher Dr Karoline Rogge and Fraunhofer ISI colleague Elisabeth Dütschke explores what makes low carbon policies credible in the eyes of companies. The researchers argue that companies’ perceptions of policy credibility are mainly shaped by the coherence and consistency of the mix of policies designed and implemented.

These insights are crucial for the promotion of low carbon transitions because credibility of climate policy has been established as a factor of paramount importance for low carbon investment and innovation and is therefore key to achieving the decarbonisation objectives set out in the Paris Agreement.

The article recommends that policy makers stick to their targets or gradually increase their ambition over time, phase out coal and reduce other fossil fuel subsidies, overcome resistance to increasing carbon prices and pay more attention to green industrial policy.

The paper looks at the case of the German electricity transition, the so-called Energiewende and is the first study to use survey data to investigate which aspects of policy mixes make companies believe in the commitment of the government to a low-carbon transition.

Read the full article.

Find out more about our project on ‘Policy synergies and trade offs for low energy innovation‘.