Why climate policies have been unable to reduce the world’s carbon emissions

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Subscribe to enjoy similar stories. Two decades of climate policy have delivered shockingly little impact—a negligible reduction in global emissions. A new study paints a bleaker picture: only 4% of policies—63 out of 1,500—made any substantial difference.

From 2000 to 2020, in 41 countries including big emitters like China, the US and India, total carbon dioxide (CO2) reduction was a dismal 0.6 to 1.8 gigatonnes, while total emissions were a staggering 778 gigatonnes. This translates to a drop of 0.08-0.23%. Thus, it’s crucial to understand what works and what doesn’t.

This study, by Stechemesser et al (2024) published in Science (bit.ly/3ZxEfgh), has used an extensive data-set of 1,500 policies enacted across 41 countries between 1998 and 2022. It employs a machine learning–augmented difference-in-differences (DID) methodology to identify 69 significant structural breaks in CO2 missions and offers a granular understanding of how different policy instruments—individually and in combination—affect emission reduction. A key finding is the superior effectiveness of policy mixes over individual interventions.

Specifically, the combination of carbon pricing mechanisms (such as carbon taxes and emission trading schemes) with regulatory instruments (like renewable portfolio standards, building codes and technology bans) consistently yielded larger reductions. These findings align with earlier ones by Goulder and Parry in 2008 (bit.ly/3Zrx2yt), which emphasized that synergy between carbon pricing and regulatory frameworks is crucial to address market failures such as information asymmetry and the ‘rebound effect,’ which can undermine the efficacy of carbon pricing if implemented in isolation. Price-based policies such as carbon