Incentive based policies provide financial incentives to encourage individuals or corporations to
become more sustainable. This can look like subsidies on solar panel installation, covering the cost
of refitting homes to be more energy efficient, and price reductions on purchasing electric vehicles.
Punishment based policies seek to punish individuals for emissions or environmentally unfriendly
behaviour. This looks like carbon taxes, fines for excessive pollution, or regulation that caps the
amount of emissions that any entity can emit.