An advanced review of climate change mitigation policies in Germany, France, and the Netherlands

Regulatory Reform refers to the establishment of rules and targets through regulations and standards that energy producers and polluters must comply with. This category includes standards for renewable energy production and final use (Falk et al 2020, Boehm et al 2022, IRENA 2023), environmental pollution (Hall et al 2021, Graver et al 2022, Pavlenko and O'Malley 2022, Sen and Miller 2022), tariff/grid regulation (Falk et al 2020, IEA 2021), and energy efficiency limitations (CAT 2022, IEA, IRENA and UN Climate Change High- Champions 2022).

Regulatory Reform policies in In Germany are primarily concerning increasing the share of renewable energy, phasing out fossil fuels, and implementing the European Union's energy efficiency directives. The energy sector is responsible for over 30% of the total emissions, with the majority coming from the combustion of mineral fuels. To address this, the German government has set a target of achieving an 80% share of renewable energy in total electricity consumption by 2030, and phasing out coal-fired power generation by no later than 2038, with some lignite and hard coal power plants were already closed in 2021. Once coal-fired power generation is eliminated, Germany will achieve net-zero emissions in its power supply. Additionally, Germany has implemented a range of measures to accelerate the deployment of renewable energy, including modifying land planning to meet onshore wind power land requirements, streamlining the approval process for renewable energy projects, and expediting grid planning and approval.

In France, Regulatory Reform policies are primarily aimed at controlling pollution and accelerating the generation of renewable energy. These measures include regulations on vehicle emissions, fuel composition requirements, waste incineration bans, and achieving a decarbonized power structure. France distinguishes itself by predominantly relying on nuclear power and renewable energy sources for its electricity generation. However, France encounters significant emissions from its transport sector, wherein approximately 90% of the fuel consumed is derived from fossil fuels. In response to this challenge, the French government has implemented renewable fuel utilization directives and established stringent monitoring systems to track emissions originating from the transport sector. Notably, in 2018, a remarkable 93% of France's electricity production was carbon-free with the next step committed to the increased integration of renewable energy recovery methods while also enforcing regulations to prohibit uncontrolled waste disposal practices.

Several measures have been implemented by the Netherlands in terms of Regulatory Reform. These measures encompass the prohibition of coal-fired power generation, the implementation of emission control in the transport sector, the acceleration of wind power construction and integration, the reduction of thresholds for renewable energy production, such as biomass energy, and the implementation of the European Union's energy efficiency directives. The Netherlands banned coal-fired power generation, thereby further increasing the proportion of wind and solar power generation. Additionally, regulations have been set on the quantity of biofuels available in the market and vehicle emissions in the transport sector.

Market-based Mechanisms refer to the market-based approach with the imposing of carbon taxes on economic activities and the establishing of emission trading systems to reduce greenhouse gas emissions (FSR Climate 2019, Bayer and Aklin 2020, Best et al 2020, Rafaty et al 2020, Green 2021, World Bank 2022).

The implementation of carbon taxes, such as vehicle emissions energy production, etc, has been observed in Germany, France, and the Netherlands. These countries have also adopted the European Union Emissions Trading System (EU ETS) to regulate greenhouse gas emissions from energy-intensive industries, including power, gas, steel, and aviation. To fulfill the commitment of reducing greenhouse gas emissions by 55% compared to 1990 levels by 2030 and achieving net-zero emissions by 2050, the EU Climate Law was enacted in July 2021. Enhancing the EU ETS is one of the comprehensive measures to achieve this target. In April 2023, the EU formally incorporated shipping into the EU ETS and introduced measures such as the Carbon Border Adjustment Mechanism and the establishment of the European Social Climate Fund.

The implementation of Commercialization Mechanisms involves policies that are designed to promote marketization, create overseas demand, and increase cross-border investment returns for domestic enterprises. These policies include encouraging the standardization of green technologies, facilitating international market expansion, and providing project financing through loan guarantees and green equity, among others (UNFCCC 2015b, IEA, IRENA and UN Climate Change High- Champions 2022, IPCC 2022).

To achieve its 2045 goals, Germany has identified CCS technology and hydrogen as important pathways. The National Hydrogen Strategy, which was introduced in 2020, includes 38 measures that focus on promoting hydrogen industrial production, expanding the hydrogen market, and establishing a reliable regulatory framework. Germany is also expanding its international presence in the hydrogen sector through collaborations in technology development and establishing hydrogen value chains. To this end, bilateral agreements and hydrogen projects have been signed with countries in the Middle East and Australia. Germany also introduced the carbon capture, utilization and storage (CCUS) Demonstration and Application Act to validate the feasibility and safety of CCS technology and establish standards for investigation, operation, monitoring, decommissioning, and liability.

The objective of Financial/Fiscal Mechanisms is to incentivize stakeholders in the low-carbon transition to reduce greenhouse gas emissions by providing them with higher returns or lower transformation costs through tax schemes, financing schemes, and subsidy schemes.

Tax incentives aimed at promoting electric vehicles, building renovations, and clean transport have been implemented in Germany, France, and the Netherlands. During the COVID-19 pandemic, these countries have provided enhanced support for small and medium-sized enterprises. Germany has introduced tax reductions or refunds for the installation of renewable energy heating systems, the promotion of electric vehicles, and the use of public transport and long-distance rail. France's tax incentives focus on housing renovations, promoting hybrid electric vehicles, and upgrading buildings for small and medium-sized enterprises. The Netherlands has implemented tax reductions or refunds to increase renewable energy electricity consumption, promote electric vehicles and bicycles, and foster research and development of energy-saving technologies.

With respect to financing schemes, green bonds are being implemented in these three countries, with a focus on transport infrastructure construction and the promotion of renewable energy. However, each country has its own emphasis. Germany prioritizes digitization of the transport sector, France focuses on housing loans, and the Netherlands places importance on clean agriculture loans. Germany has implemented federal green bonds and provides favorable financing policies for the commercialization of renewable energy, cleaner agricultural equipment, the renovation of railway networks, and digitization. France began implementing its green bonds earlier than Germany, with financing committed to energy transition, clean vehicles, infrastructure construction, and eco-housing loans. The financing in the Netherlands emphasizes sustainable and cleaner agriculture in addition to promoting renewable energy heating and energy-efficient buildings in its financing.

The most commonly used policy instrument in these three countries is the subsidies scheme, which covers almost all necessary areas. The aforementioned subsidies include the promotion of renewable energy in the buildings sector, housing renovation, and allowances; subsidies for renewable energy generation; the advancement of electric vehicles and public transportation in the transport sector; and support for clean equipment in the agricultural sector. These subsidies have notably expanded in both scale and scope in the examined countries since 2019 due to the significant impact of the COVID-19 pandemic and the increased public scrutiny to tackle the climate crisis.

Direct investment is an important policy instrument adopted by governments to address climate change, as it can be seen as providing public goods to combat the 'public bad' of climate change. This form of investment includes investments in infrastructure (Jaramillo et al 2022, Ragon et al 2022), providing cleaner heating systems and public transport services (Grazi and Van den Bergh 2008), and funding low-carbon technologies (Metz 2009).

Direct investment is a crucial measure for these three countries to directly participate in the green transition. The German government has always emphasized the research and development of high energy efficient and low-emission technologies and has implemented over 18 policies to fund cutting-edge research in areas such as electric vehicles, batteries, digital transport, hydrogen, and climate change. In addition to investing a significant amount of funds in the construction of charging infrastructure, bicycles, and other facilities, France has also introduced a series of measures for government public procurement, including the purchase of electric vehicles and clean electricity. The Netherlands encourages more business engagement in the research and development of CCUS (carbon capture, utilization, and storage) and renewable energy technologies, while the government primarily focuses on direct investment in building renovations.

Governance mechanisms refers to the set of standards for the promotion of corporate social responsibility investments, promoting climate justice, and establishing specific standards for corporate social responsibility information disclosure. Policies include disclosing corporate data related to climate change (Evain et al 2018, O'Dwyer and Unerman 2020), disclosing energy efficiency information of products (Gössling and Buckley 2016, Camilleri et al 2019), and the promotion of voluntary emission reduction agreements (Mundaca and Markandya 2016, Cornelis 2019), among others.

Germany, France, and the Netherlands are recognized as leading countries in the utilization of governance mechanisms within the realm of climate governance. Specifically, Germany has implemented a robust sustainable building assessment system, along with setting clear benchmarks for renewable energy initiatives, energy audits, and emission regulations applicable to businesses and institutions. In a similar vein, France has established mandates for enterprises to procure environmentally friendly vehicles, implemented standards for airspace management, and enacted social responsibility investment guidelines for financial asset management. Likewise, the Netherlands has put forth proposals for social responsibility investment criteria, reporting standards concerning corporate emissions, and regulations pertaining to environmentally conscious procurement practices. In terms of climate commitment issues, France has been particularly successful. Various industries, including trade, tourism, aviation, and food sectors have made climate commitments voluntarily or with government support. In terms of information disclosure, all three countries have introduced measures such as energy efficiency labels, energy consumption labels, emission reduction labels, and fuel labels. These measures will promote increased attention to the climate crisis by businesses and the public and lead to changes in production and consumption behaviors.

Firstly, the policy of phasing out coal-fired power generation by the German government has been effective in terms of environmental impact and has taken into account distributional effects, thereby playing a significant role in the smooth transition of Germany's energy sector. Coal-fired power plants have been a crucial component of the German energy system, providing almost half of the country's electricity consumption. The German government has made the decision to terminate coal-fired power generation by no later than 2038, which will have a significant impact on the balance of the energy system (Parra et al 2019). The transition process necessitates addressing issues such as employment, public pressure, and the economy. To tackle these challenges, Germany has established the Commission on Growth, Structural Change and Employment, comprising experts and stakeholders from industry, associations, labor unions, academia, and politics. The commission has been entrusted with the responsibility of devising strategies for the gradual phase-out of coal-fired power plants and providing savings plans for unemployed workers.

Secondly, the carbon pricing policy implemented by Germany and the EU Emissions Trading System (EU ETS) have played a pivotal role in reducing emissions and driving transformation across various sectors. These policies have been effective in terms of environmental impact, economic efficiency, positive synergistic effects, and transformative potential. Studies have shown that the EU ETS has led to a reduction in emissions from Germany's electricity sector through carbon prices and quotas (Schäfer 2019). Carbon pricing has also had a positive impact on the efficiency of Germany's manufacturing sector and power plants (Löschel et al 2019, Germeshausen 2020). Furthermore, carbon/energy taxes are gradually replacing labor taxes, thereby reducing labor costs. For instance, Germany's ecological tax has contributed to the creation of more employment opportunities, known as the double dividend (Murtagh et al 2013, Freire-González and Ho 2019).

Thirdly, the substitution of renewable energy for conventional energy in Germany has been significantly accelerated through the formulation and practical implementation of relevant renewable energy policies, including funding, subsidies, and pilot projects, which have been supported by extensive research. This has resulted in the realization of Germany's 100% renewable energy system, which has long-term transformative potential and positive synergistic effects (Hansen et al 2019, Oei et al 2020). Germany's renewable energy policies have provided funding for research and development of renewable energy from the outset. In the 1970s and 1980s, subsidies for demonstration projects were provided, and scaling-up occurred in the 1990s, which significantly accelerated innovation in green products through Germany's subsidies (Stucki et al 2018). The global solar photovoltaic industry has been expanded through feed-in tariffs, which have significantly reduced production costs, promoted automation and scalability, and increased its competitivity compared to fossil fuels (Lauber and Jacobsson 2016, Buchholz et al 2019). Similar efforts have been made for wind energy, with early research and demonstration projects playing a crucial role in its promotion, indicating good long-term transformative potential and synergistic effects (Chaudhary et al 2015, Dai and Xue 2015, Lacal-Arántegui 2019).

Moreover, Germany's transformative policies in the transport sector have had a profound impact on the structure of its transport industry, facilitating the achievement of energy transition goals and offering positive synergistic effects and transformative potential. Germany aims to leverage information technology and the Internet of Things to enhance the digitalization level of the transport sector and reduce mobility demand (Canzler and Wittowsky 2016). Studies suggest that Germany's transport policies can lead to the electrification of private cars by 2030 (Schmid and Knopf 2012).

Finally, Germany's energy audit policies for small and medium-sized enterprises have been effective in reducing energy consumption by 5%–70% (Kluczek and Olszewski 2017). Policies for buildings have also been successful in decreasing air pollution and having a positive impact on public health (MacNaughton et al 2018), demonstrating direct environmental effects and positive synergistic effects.

Firstly, in regards to the disclosure of greenhouse gas emissions by businesses, France places a particular emphasis on this matter. In 2013, transport service companies were required to provide reports on their greenhouse gas emissions, and by 2015, a law was enacted mandating all companies to disclose their emissions reports. France subsequently introduced laws requiring corporate climate reporting and investor climate reporting, making it one of the first countries to mandate financial institutions to disclose climate risks. These policies have the potential to encourage businesses to take greater responsibility in addressing climate change and have a transformative impact on the environment. However, the stringency of these policies needs to be strengthened, as the scope and detail of disclosures by companies vary. For example, a significant proportion of companies fail to report physical risks (Evain et al 2018).

Secondly, the role of nuclear power in achieving a balanced and stable energy transition in France is significant, owing to the coherence of policies and public support. In response to the oil crisis in the 1970s, France developed a nuclear strategy to address energy security concerns. The development of small modular reactors and significant progress in the flexibility of nuclear power plants have been achieved. This progress has been accompanied by widespread political support, a coherent nuclear waste policy, and effective management and decision-making (Metlay 2016). The French energy system has maintained continuous balance and stability (FTI Consulting 2018), providing a solid foundation for the green transformation of the country's energy sector.

Furthermore, the implementation of carbon tax policies in France has encountered challenges in promoting public acceptance while ensuring fairness. The French public has expressed strong dissatisfaction and resistance to the implementation of carbon tax policies. The increase in fuel costs due to the rise in carbon taxes triggered the iconic 'Yellow Vest' movement in France (Berry and Laurent 2019, Lianos 2019). This movement involves issues of income inequality and other social concerns. The costs and benefits of carbon taxes vary among different groups, and between urban and rural areas. There is a contradiction between public concerns about climate change and their expectations regarding costs. The French government needs to enhance its communication efforts and increase public acceptance of carbon taxes (Douenne and Fabre 2020), while also giving due consideration to the fairness and economic effectiveness of the policies.

Finally, France aims to increase the proportion of renewable energy in its electricity generation. It is crucial for France to integrate into the European grid and import renewable energy (Brown et al 2018). However, this may have implications for energy security and the sustainability of energy production outside the European Union (Daioglou et al 2020, Mandley et al 2020). Therefore, policymakers need to consider the potential negative synergistic effects of such policies.

Firstly, the impact of climate litigation on climate change mitigation policies in the Netherlands has been significant. Governments and legislative bodies can use their administrative or legislative powers to make commitments to reduce greenhouse gas emissions. However, such commitments and their accompanying policies must consider environmental effectiveness, transformative potential, and institutional requirements. In recent years, climate litigation has become an important means of either promoting or impeding the Dutch government's response to climate change (Roy and Woerdman 2016, Mayer 2019, Paiement 2021, Sindico et al 2021). The Urgenda vs State of the Netherlands case constitutes a landmark example. The District Court made a judicial request that the emission reduction target of 17% set by the Dutch government was deemed inadequate in representing a just and equitable contribution from the Netherlands. Consequently, the court issued a directive to the Dutch government, mandating a minimum reduction of 25% in emissions by the conclusion of 2020, and further requiring the implementation of supplementary measures to attain this objective. This ruling was ultimately supported by the Supreme Court in 2019. Since 2015, significant changes have been observed in climate policies in the Netherlands. These changes include the introduction of climate legislation and the decision to close all remaining coal-fired power plants by 2030 (Verschuuren 2019, Wonneberger and Vliegenthart 2021).

Moreover, the Dutch government has made remarkable progress in promoting a circular economy and has emerged as a leading example in this domain. The circular economy is a crucial strategy for reducing society's demand for energy and materials, and the Dutch government has demonstrated maturity in implementing circular economy policies, achieving good environmental effectiveness and transformative potential. According to the Organisation for Economic Co-operation and Development (OECD 2019), if the world continues to follow traditional production and consumption patterns, the increasing demand for energy and materials could lead to severe environmental consequences by 2060. However, the circular economy presents a more sustainable alternative by reducing environmental harm while maintaining the same level of demand. The Netherlands Environmental Assessment Agency has proposed an innovative circular strategy, which includes Refuse, Rethink, Reduce, Reuse, Repair, Refurbish, Remanufacture, Repurpose, Recycle, and Recover energy (Potting et al 2018). Additionally, the government offers green loans, tax incentives, and research and development subsidies for circular economy projects and technologies. Finally, the sustainable public procurement policy advocated by the Dutch government is a notable example of effective climate change mitigation policy. This policy is characterized by its distinct features, evident effectiveness, and wide-ranging scope.

Since 2005, the Dutch government has implemented sustainable public procurement policies that cover various aspects such as green public procurement, bio-based public procurement, ESG, and the circular economy. This has resulted in environmental effectiveness and positive synergistic effects. Firstly, the implementation of green public procurement measures serves to curtail the detrimental ecological effects stemming from both corporate production and government consumption (Melissen and Reinders 2012, Cerutti et al 2016, Ghisetti 2017). If all public authorities in the Netherlands were to adopt national sustainable public procurement standards, it could potentially reduce carbon dioxide emissions by a significant 3 million tons (ICLEI 2021). Secondly, businesses that attain commendable levels of emission reduction can obtain a competitive edge through sustainable public procurement, thereby fostering an incentive for more companies to actively reduce their greenhouse gas emissions (Rietbergen and Blok 2013, Rietbergen et al 2015). Finally, public procurement programs that prioritize green technologies have the potential to stimulate technological innovation (Baron 2016, Peñasco et al 2021).