12 policies to unlock deep decarbonisation

This briefing by the Climate Bonds Initiative outlines 12 critical policy interventions designed to accelerate the decarbonisation of hard-to-abate sectors—such as steel, cement, chemicals, shipping, trucking, and aviation—by overcoming market failures and reducing investment risks.

• The document identifies 12 key policies to unlock deep decarbonisation, categorized into three goals: simplifying the path via standards and disclosure, steering investment by incorporating transition risk and derisking opportunities, and facilitating investment in critical raw materials.
• To provide clarity for sustainable investment, the briefing recommends establishing science-based standards and national/regional taxonomies that align internationally to support cross-border capital flows. It cites the EU-China Common Ground Taxonomy (CGT) as a basis for such development, noting that Hong Kong is utilizing it to become a hub for international capital.
• The briefing advocates for mandatory climate and nature-related disclosures for financial institutions and corporates to ensure consistency and comparability. Recommended requirements include full value chain disclosure, the publication of 1.5°C-aligned transition plans, and the creation of a centralised data platform.
• Energy Transition Mechanisms (ETMs) are proposed to accelerate the retirement of fossil power assets and reduce stranded asset risk. The document highlights South Africa’s USD 8.5bn Just Energy Transition Partnership Investment Plan, funded by the EU, France, Germany, UK, and US, though it notes that only 3% of this is grant financing.
• The briefing suggests using carbon pricing and Carbon Border Adjustment Mechanisms (CBAM) to incentivise global action and prevent 'carbon leakage,' where industries move offshore to avoid taxes. It also calls for the phaseout of fossil fuel subsidies, which reached USD 1tn per year in 2022.
• To lower the cost of capital for innovative technologies, the document recommends derisking instruments such as direct subsidies, guarantees, and Contracts for Difference (CfDs). Examples include the US Inflation Reduction Act's tax credits for clean hydrogen and the InvestEU Fund's goal to mobilise over EUR 372bn in investment via a EUR 26.2bn budget guarantee.
• The briefing emphasizes the need for priority infrastructure investment to prevent bottlenecks, specifically mentioning electricity grids, carbon capture and storage (CCS), and hydrogen clusters. It notes that global green hydrogen use is expected to reach 15-20% of the net-zero energy mix.
• The document highlights the critical need to diversify the supply of raw materials, as a net-zero pathway could quadruple demand. It notes that 75% of lithium, cobalt, and rare earths are currently produced in three countries and cites Australia's March 2022 Critical Minerals Strategy, which included over USD 1.6bn in state aid.

APA

Burge, L., & Passaro, F. (2023). 12 policies to unlock deep decarbonisation. Climate Bonds Initiative. https://www.climatebonds.net/files/documents/publications/12-Policies-to-Unlock-Deep-Decarbonisation.pdf

Chicago

Burge, Lily, and Fabio Passaro. 12 policies to unlock deep decarbonisation. Climate Bonds Initiative, 2023. https://www.climatebonds.net/files/documents/publications/12-Policies-to-Unlock-Deep-Decarbonisation.pdf.

Wikipedia

{{cite report |last1=Burge |first1=Lily |last2=Passaro |first2=Fabio |title=12 policies to unlock deep decarbonisation |publisher=Climate Bonds Initiative |date=June 2023 |url=https://www.climatebonds.net/files/documents/publications/12-Policies-to-Unlock-Deep-Decarbonisation.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{burge2023policies, author = {Burge, Lily and Passaro, Fabio}, title = {{12 policies to unlock deep decarbonisation}}, institution = {Climate Bonds Initiative}, year = {2023}, month = jun, url = {https://www.climatebonds.net/files/documents/publications/12-Policies-to-Unlock-Deep-Decarbonisation.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }