3 policy alone can spur radical clean invention but cannot complete full industrial transition; auxiliary policies help scale niche clean technologies to replace incumbent polluting socio-technical regimes. Dynamic Policy Adjustment across Regions & Industries For high-emission traditional manufacturing sectors, combine moderate carbon pricing with phased emission standards; for emerging clean sectors, lower regulatory threshold and leverage market demand to accelerate radical clean technology commercialization; tailor market policy tightening pace based on regional industrial foundation and cost-bearing capacity. Policy OutcomesSupplementary Heterogeneity & Boundary EU countries gradually converged to near-max C&C stringency by 2010, while market policy stringency stays universally low with large upgrade space; C&C may boost existing mature clean-tech deployment but fails to generate new patentable radical innovation; study sample only covers listed manufacturing firms, excluding small private enterprises and utility industries. Recommendations Prioritize Market Instruments as Core Decarbonization Policy Design stepwise, predictable carbon tax or cap-andtrade systems to generate stable long-run price signals; gradually raise market policy stringency to reshape industrial market structure and drive radical clean R&D; reference France’s progressive carbon pricing path to lock in future cost expectations for corporate long-term green investment planning. Deploy C&C Rules as Complementary Supplementary Tools Retain appropriate command-control emission standards to ensure mature clean technologies’ large-scale market penetration after radical tech is invented; avoid overreliance on rigid uniform regulatory mandates which lock firms into incremental end-of-pipe abatement rather than transformative clean innovation. Build Multi-layer Complementary Policy Mix for Full Sustainability Transition Pair market pricing mechanism with targeted public environmental R&D subsidies, green infrastructure investment and emerging clean-tech niche protection policies; market Figure 2 Policy stringency index Figure 3 Additional Event-time coefficient plots for TA LUFT in Germany Directing environmental innovation toward radical clean technologies for sustainable transitions: Market-based vs. command-and-control policies Public Policy BULLETIN
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