What can governments do?

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Topic: People changing climate. Basics.

What can governments do?

Despite efforts to reduce emissions of greenhouse gases, emissions are still increasing in most places (read more about increasing emissions here). It is unlikely that the increase in emissions of greenhouse gases will slow down through voluntary efforts of concerned individuals and businesses alone. Since households (both families and single persons) and private companies are responsible for the bulk of emissions, governments in many countries, including the European Union, are attempting to create incentives for them to reduce their emissions. The instruments they use include the following:


If you have to pay taxes to emit greenhouse gases, it makes economic sense to avoid emitting them in the first place. Some European countries have therefore introduced special taxes on the fossil fuels that cause emissions of CO2. This means that prices of petrol, heating oil and other fossil fuels are high which gives people an incentive to use less. As long as there are only a few countries that have these taxes, businesses which use a lot of energy will be tempted to move their production elsewhere. This is why countries with carbon taxes often exempt industries which are in strong competition with foreign firms from having to pay these taxes.

Emission permits

The government can set a limit for how much greenhouse gases can be emitted within the country. It can then issue permits (also called “allowances” or “quotas”) to emit greenhouse gases. An emissions permit is a certificate that gives the holder the right to emit certain amounts of greenhouse gases to the atmosphere. The government can decide whether or not those who are given permits should be allowed to sell them to others. This kind of “emissions trading” ensures that emissions reductions are as inexpensive as possible for business and industry. Businesses that would have to invest a lot of money in reducing emissions can buy extra permits instead. Companies that can reduce their emissions at a reasonable cost can do so, and then sell their permits for a profit. A system of permits and emissions trading can also be limited to certain industries.

emissions trading

1. Read more about emissions trading in the EU here. Illustration: Nils Axel Kanten/CICERO.

Laws and regulations

Governments regulate which products can be sold. For example, they can forbid the sale of electric appliances that use more electricity than necessary and cars that use too much petrol. In cold countries, the government can introduce regulations for insulating buildings to minimize the amount of energy used for heating. Governments can also forbid activities in industry and agriculture that generate particularly high emissions or require the use of special equipment to reduce emissions. For example, owners of rubbish dumps or manure tanks can be required to capture the methane that is generated. Coal and gas-fired power plants can be made to use the heat generated in the electricity production process.

laws to reduce emissions of greenhouse gases.

2. Laws and rules: Governments can make laws which require industry to reduce their emissions of greenhouse gases. Photo: Microsoft Clipart.


Governments can create incentives for businesses and households to invest in equipment that reduces emissions. In countries where homes need heating in the winter, governments can subsidise the cost of adding insulation or help people to invest in heating elements that run on biofuels. In some countries certain types of vehicles, such as electric cars, may be exempted from registration fees or from paying at toll booths.


By funding research, the government can stimulate technological innovations which reduce emissions of greenhouse gases – such as wind mills, CO2 capturing, or cars that run on hydrogen.

The disadvantage of many of these is that they cost money – for the government, the firms, or for households. Some are relatively inexpensive to implement, others are very costly. The question is whether we believe that the benefit, in terms of a reduced danger of climate change, is worth the cost.

Wind power - a renewable energy source

Wind power is a renewable energy source that provides electricity without generating CO2. This is why governments in many countries support the establishment of wind power plants. Wind power represents only a small fraction of the energy supply in most countries, but Germany and Great Britain, for example, have plans to expand their wind power supply. The Danish wind mill industry produces about half of the windmills on the world market. Sales in 2002 were about 22 billion Danish Kroner. It is expected that wind power will make up 17% of Denmark’s electricity needs in 2003.


3. Windmills: Windpower is a renewable energy source that generates electricity without emitting CO2. Photo: Corel Gallery.

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About this page:

Author: Camilla Schreiner - CICERO (Centre for International Climate and Environmental Research - Oslo) - Norway. Scientific reviewers: Andreas Tjernshaugen - CICERO, Norway - 2004-01-20 and Dr. Knut Alfsen - Statistics Norway, Norway - 2003-09-12. Educational reviewer: Nina Arnesen - Marienlyst School, Oslo, Norway - 2004-03-10. Last update: 2004-03-27.

Last modified: Friday, 17 May 2019, 3:11 PM