Agent‐based models (ABMs) have recently seen much application to the field of climate mitigation policies. They offer a more realistic description of micro behavior than traditional climate policy models by allowing for agent heterogeneity, bounded rationality and nonmarket interactions over social networks. This enables the analysis of a broader spectrum of policies. Here, we review 61 ABM studies addressing climate‐energy policy aimed at emissions reduction, product and technology diffusion, and energy conservation. This covers a broad set of instruments of climate policy, ranging from carbon taxation, and emissions trading through adoption subsidies to information provision tools such as smart meters and eco‐labels. Our treatment pays specific attention to behavioral assumptions and the structure of social networks. We offer suggestions for future research with ABMs to answer neglected policy questions. This article is categorized under: Climate Economics > Economics of Mitigation

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We analyze the eectiveness of environmental policy when consumers are subject to social inuence. To this end, we build a model of consumption decisions driven by sociallyembedded preferences formed under the inuence of peers in a social network. This setting gives rise to a social multiplier of environmental policy. In an application to climate change, we derive Pigouvian and target-achieving carbon taxes under sociallyembedded preferences. Under realistic assumptions the social multiplier is equal to 1.30, allowing to reduce the eective tax by 38%. We show that the multiplier depends on four factors: strength of social inuence, initial taste distribution, network topology and income distribution. The approach provides a basis for rigorously analyzing a transition to low-carbon lifestyles and identifying complementary information and network policies to maximize the eectiveness of carbon taxation.

We assess evidence from theoretical-modelling, empirical and experimental studies on how interactions between instruments of climate policy affect overall emissions reduction. Such interactions take the form of negative, zero or positive synergistic effects. The considered instruments comprise performance and technical standards, carbon pricing, adoption subsidies, innovation support, and information provision.Based on the findings, we formulate climate-policy packages that avoid negative and employ positive synergies, and compare their strengths and weaknesses on other criteria. We note that the international context of climate policy has been neglected in assessments of policy mixes, and argue that transparency and harmonization of national policies may be key to a politically feasible path to meet global emission targets. This suggests limiting the complexity of climate-policy packages. Key policy insights:-Combining technical standards or targets, such as renewable-energy quota, or adoption subsidies with a carbon market can produce negative synergy, up to the point of adding no emissions reduction beyond the cap. For maximum emissions reduction, renewable energy policy should be combined with carbon taxation and target expensive reduction options not triggered by the tax.-Evidence regarding synergy of information provision with pricing is mixed, indicating a tendency for complementary roles (zero synergy). Positive synergy is documented only for cases where information provision improves effectiveness of price instruments, e.g. by stimulating social imitation of low-carbon choices.-We conclude that the most promising packages are combining innovation support and information provision with either a carbon tax and adoption subsidy, or with a carbon market.We further argue that the latter could have stronger potential to harmonize international policy, which would allow to strengthen mitigation policy over time.

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