The Experimental Approach to Net Zero Policies

The upcoming climate-critical decade will determine whether we progress sufficiently toward a net-zero economy to limit global warming to 1.5 degrees. Climate innovation, alongside major behavioral change, is critical for success, as around 35 percent of the technologies necessary for net zero are not yet developed and/or deployed1. However, despite having the most ambitious decarbonization agenda, Europe still needs to create a culture and practice of evidence-based policy- and decision-making, which is already emerging in the US2,3. In the light of the billion euros being spent on green deal policies, we urgently require better evidence on what energy innovation policy instruments are most effective4. To do so, the continent should apply the scientific method to its net zero science policy, which the US does with the Evidence-Based Policymaking Act. Specifically, it should leverage experimental methods such as randomized controlled trials (RCTs) as sources of evidence to inform climate policies5. So far, they are almost exclusively conducted in the field of development policies; where they received the Nobel prize for alleviating global poverty. Increasingly, they have been used to make innovation policies more evidence-based6. We argue that their deployment for creating more evidence-based climate and green innovation policies is promising to maximize their effectiveness per Euro spent7. The method is often considered a gold standard of impact evaluation as it enables understanding of the causal effects of policies with a high level of confidence. Ideally, they could help identify what works well – and what does not – in greening growth policies7. So far, their potential is underexplored in the field of climate policies8, especially covering firms9, but also with regards to behavioral aspects of reducing carbon emissions10. The potential return on investment of such a paradigm shift is estimated to range between 21 and 37 percent11.