Economic Policies for Affordable, Secure and Clean Energy: Synthesis Report

Affordable, secure, and clean energy is a central goal for policymakers worldwide. Against this backdrop, the Council on Economic Policies convened a series of country roundtables in Paris, London, Washington, D.C., New Delhi, and Berlin, followed by a global convening in Zurich to explore policy packages – combining fiscal, regulatory and market design measures – in support of this objective.

Drawing on these discussions, and the cross-country perspectives they offered, this report identifies priorities and policy options. It adopts a sectoral approach, recognising that electricity, transport, buildings, and heavy industries differ in terms of technologies, investment horizons, market structures, and exposure to regulation and taxation. Each section concludes with a list of policy recommendations to address key challenges.

Recent energy crises, surging electricity demand and accelerating climate change have pushed affordable, secure, and clean energy to the top of policy agendas worldwide. The challenge respects no borders, making cross-country perspectives timely. This report offers policy recommendations to advance this agenda across four sectors: electricity, transport, buildings, and heavy industries.

The growth in low-carbon electricity generation now outpaces the global rise in electricity demand. Notwithstanding these developments, low-carbon power (including hydro and nuclear) still covers less than a tenth of final energy consumption, and fossil fuels remain the dominant supply of energy. Reaching an “age of low-carbon electricity” will require not only more investment in power infrastructure, but also further electrification of transport, buildings, and industry. Policy packages combining carbon pricing, time-limited subsidies, regulation, and market reforms are critical to deliver the investments needed. Streamlined permitting, respectful of local communities, is equally essential.

The rapid spread of electric vehicles (EVs) illustrates how fast energy markets can shift. Battery Electric Vehicles and plug-in hybrids are expected to account for 28% of new car sales globally in 2026, with high penetration especially in China and Europe. The energy crisis triggered by the Strait of Hormuz blockade is reinforcing this momentum. Purchase incentives, combined with fuel taxation, have been decisive but are fiscally costly. As EVs become increasingly affordable – with falling new-vehicle prices and a growing second-hand market – governments in frontrunner markets are progressively scaling back purchase subsidies. Accelerating the transition will also require shifting travel demand toward public transport, which calls for deeper changes in travel behaviour and urban planning.

In buildings, electrification of heating, higher efficiency of appliances and retrofits are progressing. This is supported by efficiency standards, subsidies, and regulation. However, realised energy savings routinely fall short of engineering estimates, and renovation costs remain a major barrier. Renovation subsidies should thus be tied to measured rather than modelled performance. In many countries, electrification of buildings is held back by the high price of electricity relative to natural gas. A key factor behind this are higher taxes and levies on electricity compared to natural gas. Governments should rebalance energy taxation accordingly.

Heavy industries are beginning to invest in low-emission production, but at a scale well below what the transition requires. Persistent cost gaps between conventional processes and alternatives – clean electrification, low-carbon hydrogen, and carbon capture – remain the main obstacle. Policy instruments with a proven track record include pricing carbon emissions, contracts for difference to close the cost gap and tax credits to attract new investments. Border carbon adjustments can help ensure that domestic carbon pricing does not simply push high-emission production offshore to countries with laxer policies – a risk known as carbon leakage.

Across all sectors, combining carbon pricing with temporary fiscal incentives, regulation and market reforms into coherent policy packages is what accelerates progress toward an affordable, secure and clean energy future. Recycling carbon pricing revenues in ways that protect vulnerable households is also an important aspect. Stable and predictable policy frameworks are also essential to attract private investment and make successful steps forward.

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