Without policies that provide incentives to act, the enormous potential for reduction of greenhouse gas emissions will not be realized. This chapter is therefore devoted to discussing the various policies that can be used to influence behaviour of consumers and companies, the circumstances under which they are effective, and the administrative capacities required. With emission reduction objectives becoming more stringent, there is a shift from ‘soft policy instruments’ such as funding for research and development, information, voluntary agreements, and green government procurement to ‘hard instruments’ like regulations, taxes, and tradable permit systems. Particularly trading systems are becoming popular. Climate policies are just half the story. It is equally important to use non-climate policies, such a general tax, macro-economic, trade, and other environmental policies to change behaviour in a more climate friendly direction. In practice combinations of policies are always needed to achieve optimal results. Lessons have been learned from implementation of policies about what works best in what sector. Ultimately it is the total package of policies in a country that will determine greenhouse gas emissions and some examples of that will be discussed.