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Objectives set by the EU in line with the Paris Agreement will, over time, lead to demands for greenhouse gas emissions reductions including, increasingly, from energy-intensive industries that can only be fulfilled by rapid deployment of breakthrough low-carbon technology. Disincentive policy measures such as carbon pricing will not in themselves be sufficient to achieve these goals. There is a need for a set of tools that can help to create and grow markets in new low-carbon technology, particularly against a background of international competition and widely varying carbon constraints. This Policy Insight reviews a number of tools that could boost investment in low-carbon technology.

Milan Elkerbout is a Research Fellow at CEPS Energy Climate House. Christian Egenhofer is Director of CEPS Energy Climate House.