Advancing ‘Net Zero Competition’ in Asia-Pacific under a dynamic era: a comparative study on the carbon neutrality policy toolkit in Japan, Singapore and Hong Kong

The net zero strategy has created a global competition for carbon finance innovation, with over 50 countries and regions aiming for carbon neutrality by 2050 or 2060. This paper provides a preliminary comparative study of carbon neutrality policy instruments in Japan, Singapore and Hong Kong SAR, China: three critical and distinct economies in the Asia-Pacific region. The study examines policies in six categories that support carbon neutrality and compares them based on political economy and market features. The findings reveal that Japan has a rather diverse policy matrix, while Singapore has made rapid progress in carbon finance in a controversial political economy. Hong Kong’s renewable energy policies use a multifaceted approach that emphasizes both carbon emission reduction and environmental quality improvement. Although Hong Kong aspires to become a centre for green finance, it currently lags behind Singapore in this area. The study sheds light on the development and implementation of emerging policies related to carbon neutrality in Asia-Pacific region.


Introduction
Conference of Parties (COP) 26 had highlighted concerns about financial support measures for greenhouse gas (GHG) emissions. The carbon neutrality policy toolkit, therefore, has become a critical element in national climate action (Ding, 2022;Perdana & Vielle, 2022;Su et al., 2022;. In the post-COP-26 era, there have been over hundred countries and regions that have released or updated their climate action or commitment to achieve carbon neutrality around the mid-twenty-first century (2045, 2050 or 2060) (Adebayo et al., 2022;Bigerna & Polinori, 2022;Li et al., 2022;Oyewo et al., 2022;Shi et al., 2022;Wang et al., 2022a). This transition to a net-zero society triggers a new round of carbon finance-driven policy innovation in various economic systems. A policy toolkit is critical for advancing the transition to carbon neutrality. A fundamental transition pathway towards carbon neutrality is to leverage the costs between fossil fuel-based and carbon-neutral or low-carbon technologies and industries (Adebayo et al., 2022;Crowther et al., 2022;Dong et al., 2022;Oyewo et al., 2022;Wang et al., 2023), in which the policy toolkit would play a vital role. Exploring how the policy mechanism would help the transition to carbon neutrality is valuable for the follow-up technology roadmap and national action design (Liu et al., 2018Ren et al., 2015;Tong et al., 2023). Regarding the regional and local context, Asia-Pacific is one of the most diverse and dynamic economies, with significant influences on the global supply chain, resource consumption and GHG emissions (Ding, 2022;Kim et al., 2018;Mancheri et al., 2018;Shah et al., 2020;Wang et al., 2018). Notably, apart from mainland China, Japan, Singapore and Hong Kong SAR (China) have distinct economic positions in the Asia-Pacific region and have made significant efforts to advance carbon neutrality strategies (Ding, 2022;Srivastava & Kumar, 2022;Yao et al., 2022;Zhou, 2022). Therefore, the three jurisdictions serve as an ideal laboratory to test various carbon neutrality policy tools in different political, economic and market contexts. However, to our best knowledge, this kind of work has not been systematically done yet.
Against this background, this research performs as a first attempt to conduct a comparative study on the carbon neutrality policy toolkit in the three critical and unique economies-Japan, Singapore and Hong Kong SAR, China. Carbon neutrality-related policies are investigated in six categories based on various carbon neutrality support mechanisms: (1) regulatory reform, (2) market-based mechanisms, (3) commercialisation mechanisms, (4) financial/fiscal mechanisms, (5) governance mechanisms and (6) direct investment. The policy screening and investigation under this taxonomy would help to answer critical question 1: how the policy mechanism would help to the transition to carbon-neutral in a certain way, and how to design a policy package based on that. We further compare these policies (all policy information contained in this article can be found in "Supplementary material" 1) and map them based on different political economy and market features, and this will help to answer critical question 2: how different political economy and market contexts would affect the various carbon neutrality 1 3 policy tools? Results are expected to shed light on how various emerging carbon neutrality-related policies are developed and implemented in the diverse and dynamic environments of Asia-Pacific. This paper is organised as follows: after this introductory section, Sect. 2 offers a review of the existing literature and provides a comprehensive analysis of the recent progress on carbon neutrality policy implementations in Japan, Singapore and Hong Kong. Section 3 explains the methodology and data, particularly our policy collection, screening and summary based on the policy mechanism and taxonomy. Section 4 presents the results and reflections. And finally, Sect. 5 draws the conclusions and implications, including policy implementations in various legislative systems.

Literature review
Carbon neutrality (CN) is a series of transition processes that result in a fundamental transformation in a socioeconomic system, encompassing technological, institutional, political, and sociocultural changes (Andersen & Markard, 2020;Geels, 2019). As a result, governments must implement diverse policy toolkits for thorough disposal with constant incentive methods of governance Gao et al., 2021). With the increasing popularity of carbon neutrality in the past few years, an expanding body of studies has delved into policy instruments and their effectiveness in achieving zero emissions. Scopus, the largest abstract and citation database of peer-reviewed literature, was consulted in order to conduct a complete examination of the phenomenon.
'Carbon neutrality' AND 'policy' served as the search strings for the literature survey. We used three primary criteria to choose the articles. Only papers containing the string 'Carbon neutrality' AND 'policy' in (1) the article title, (2) the abstract or (3) the keywords were evaluated. The Scopus research found that 1154 documents were published between 2014 and 2022, with a significant increase in relevant research in 2021 and 2022 (264 and 731, respectively), accounting for over 80% of all research. However, the search results revealed a large number of articles that were not relevant to our field of interest. To enhance the accuracy of the search while limiting irrelevant results, we refined our investigation by applying the restriction of 'keywords'. This reduced the total number of documents to 161, resulting in a marked improvement in accuracy. Consequently, we decided to thoroughly examine all of these studies. When the abstract and content of these articles were reviewed in detail, only 86 articles had a strong connection with policy review and assessment. For example, papers that use an integrated emission assessment model to predict emission scenarios are excluded from further research.
Following the research objectives of this paper, the 86 articles were reviewed from the following two perspectives: the first objective is to determine whether they have adopted an analysis framework to examine policy packages or examine the effectiveness of a particular type of policy tool only, and the second objective is to examine what types of policies they have reviewed and their respective principles for the policy classification. We did so based on the consideration that a narrow focus on individual policies is insufficient, as it fails to capture the interplay Advancing 'Net Zero Competition' in Asia-Pacific under a dynamic… and combination of policy instruments that make up the policy mix. Technological change and transitions are complex processes that involve numerous actors, bottlenecks and market failures that cannot be addressed by a single policy (Kivimaa & Kern, 2016;Schmidt & Sewerin, 2019). Thus, the evaluation of the policy mix is crucial in addressing these challenges and in achieving the desired outcomes of promoting sustainable technologies and facilitating the transition to a carbon-neutral economy. The result shows that most of them (74) concentrated on the effectiveness of particular types of policy instruments, for example, tested carbon tax (Cheng et al., 2021a;Shen et al., 2022;Tao et al., 2021;Wang et al., 2022b), carbon trading system (Can et al., 2021;Gao et al., 2022;Zhou, 2022), public investment (Cai et al., 2021;Cheng et al., 2021b;Udemba & Philip, 2022), etc. tools in fostering private sector involvement, expansion of money flow, renewable technological innovation, etc., which are supposed to have a positive influence on carbon reduction. The full list of the literature discussed above, as well as their research focus (on which type of policy tool), are summarized in "Supplementary material".
The remaining 12 papers that encompass various sorts of policy tools will be addressed in detail. The attributes of these papers are shown in Fig. 1. Some of them (Ibrahim et al., 2022;Lim, 2021;Wang et al., 2022c;Wei & Xiao, 2022, p. 202) divided transition strategies and policies towards carbon neutrality into several categories; however, due to the lack of a systematic review of existing policy texts, these studies failed to clarify the gap between the current low-carbon policies and the emission goal. While some of them Dahal et al., 2018;Liu & Lu, 2022) concentrated their research on a specific technology field, this has led to a lack of macro-level insight, especially when considering to what extent these technologies can contribute to carbon neutrality. Zhou et al. (2022) adopted an institutional analysis and development (IAD) framework and used a bibliometric approach to cluster carbon neutrality policies into six groups, while Tan et al. (2022) analysed 168 policies to draw an overall picture of China's low-carbon efforts; however, due to the lack of an assessment framework to integrate policy packages, they still lead to uncertainty for decision-makers regarding what instrument package they are expected to choose when pursuing multiple objectives in the energy transition process. Zhou et al. (2022) started from a cost-effective perspective to explore transition strategies, which has some similarities with the methodology proposed in this research; however, they only covered discussion on key policy instruments such as the carbon tax, subsidies for purchasing electric vehicles, and a ban on new internal combustion engine cars, leaving a lack of framework scope to think about policy mix for the transition. The same problem exists with the papers by Qin et al. (2021, p. 7) and Ibrahim et al. (2022).
In conclusion, the existing literature has demonstrated the effectiveness of policy instruments in attaining a zero-emission goal and has outlined potential policy classifications. However, there are still some issues to be addressed. First, there appears to be a disconnect between the carbon neutrality goals and the policy mix, and current studies have failed to determine whether existing policies are sufficient for achieving carbon neutrality. Second, there has been a lack of discussion about innovative policies, with most studies focusing on traditional instruments such as carbon 1 3 Advancing 'Net Zero Competition' in Asia-Pacific under a dynamic… pricing and subsidies. This is surprising, given the importance of financial mechanisms for the incubation of green markets and de-risking.
To address these gaps, this research aims to conduct a systematic review of the policy systems in Hong Kong, Singapore and Japan under a creative taxonomy framework. The objective is to integrate government policy efforts, such as regulatory reform, financial and fiscal policy, direct investment and governance tools, with the fundamental adjustments required to achieve carbon neutrality. Further, this study will explore to what extent governmental interventions are being implemented to balance the cost-effectiveness of clean energy in comparison to fossil fuels and identify any areas where there may be missing blocks that require attention (Table 1).

Overview of notable renewable energy (RE) incentive initiatives in Japan
Japan has access to an extensive range of RE sources, including hydroelectric, solar and wind power. In 2021, Japan's proportion of global RE generation rose from 20.8 to 22.4%, reflecting a significant increase (Otsuki et al., 2022). Simultaneously, the government has laid out plans to augment its target for RE's share of the nation's power output from 22 to 24% in 2019 to 36-38% by 2030 (Muneer et al., 2022). To achieve these goals, Japan has reinforced its existing incentive schemes for renewables, including those outlined below. These actions align with Japan's objectives of achieving a low-carbon society and a net-zero society (Dou et al., 2018a(Dou et al., , 2018bFujii et al., 2016;Liang et al., 2016;Togawa et al., 2014Togawa et al., , 2016. Feed-in Tariffs (FiT): In 2012, Japan instituted a countrywide feed-in tariff (FiT) programme (Ayoub & Yuji, 2012). Transmission owners can enter into a power purchase agreement with owners of RE projects under the FiT programme if the project has been certified by the Ministry of Economy, Trade and Industry (METI, 2022). The fixed cost of FiT has been steadily decreasing over the past few years. However, these prices remain higher than the current market price of power, suggesting that the FiT programme is the primary route to market renewable projects in Japan (Dong & Shimada, 2017).
Japan has published its own form of REC since 2003 and has experimented with renewable portfolio standards (RPS) that require a minimum percentage of green electricity in the energy mix (Matsumoto et al., 2017). The country has three types of certificates: non-fossil certificates (NFCs), green electricity certificates (GECs) and J-credits (RE generation) (METI, 2019a(METI, , 2019b. Each certificate has distinct requirements for issuance, purchase and usage conditions. To meet the quota, this combination can be used instead of real ownership of a green energy power system or a direct, long-term contract with a green energy supplier. Carbon Tax: In October 2012, Japan introduced a carbon tax of 2.89 JPY/t CO 2 of carbon dioxide as part of a broader effort to restructure its tax system (Sterner, 2012). Although the tax applies to all fossil fuels, including petroleum, oil products, natural gas and coal, the government grants certain carbon tax rate exclusions and refund mechanisms for energy-intensive businesses that use goods derived from these fuels. The tax rate has remained static since 2016, and the existing policy has been criticised for being inadequate in addressing the pressing climate crisis and making significant adjustments to domestic carbon emissions (Hao et al., 2021;Yoshino et al., 2021).
Green Finance Action Plan: This is a set of policies that encourages financial institutions, including banks, to invest in RE. Recent measures include the removal of income thresholds for clients borrowing financing for green energy projects from international banks with Japanese operations (Saeed Meo & Karim, 2022;Schumacher et al., 2020). The Bank of Japan has begun offering zero-interest, long-term loans for climate change-related programmes, while bonds issued by foreign bank branches in Japan can now fund RE projects (Tolliver et al., 2021).
Advancing 'Net Zero Competition' in Asia-Pacific under a dynamic…

Overview of notable RE incentive initiatives in Hong Kong
As of November 2020, Hong Kong had become the first Chinese city to set a specific timeline for reaching carbon neutrality by 2050. The Hong Kong Climate Action Plan 2050, released on 6 October of that year, established an intermediate goal of lowering Hong Kong's carbon emissions by 50% by 2035 compared to 2005 levels (EPD, 2021). Some noteworthy initiatives have been undertaken to encourage carbon reduction, including: Feed-in Tariffs (FiT) and renewable energy certificates (RECs): The electricity market in Hong Kong is primarily controlled by three major stakeholders: the government and two utilities (Hong Kong Electric Company and CLP Power Hong Kong Limited) (CLP, 2018;HKelectric, 2018HKelectric, , 2019. In an effort to encourage the growth of distributed RE, additional measures have been included in the post-2018 scheme of control agreements (SCAs) with the three power suppliers (GovHK, 2019). These measures include the implementation of FiT and RECs (Dato et al., 2021a). Given that the power generated from renewable sources might be sold to the power companies at a rate higher than the usual electricity tariff rate to help recover the expenditures of investment in the RE systems and generation, the FiT will help stimulate the private sector to explore investing in RE. Energy suppliers will also provide RECs for RE units Mah et al., 2021;Song et al., 2016). These RECs are a great way for the community to publicly demonstrate their enthusiasm for RE. In addition to mitigating the overall tariff impact on customers brought about by the implementation of the FiT scheme, the cash generated from RECs will also help fund the scheme (Dato et al., 2021b;Mah et al., 2018).
Green Financing Incentive: In September 2018, the Securities and Futures Commission (SFC) released its Strategic Framework for Green Finance (SFC, 2018), which aims to promote Hong Kong as a global green finance hub and facilitate the creation of green or Environmental Social Governance (ESG)-related investment products. To hasten the expansion of green and sustainable finance in Hong Kong and to back up the government's climate plans, the SFC began the formation of the Green and Sustainable Finance Cross-Agency Steering Group (CASG) in May 2020 (HKMA, 2022). Through its 'Small Medium Sized Enterprises (SME) Green Financing Incentive Scheme', the Bank of China (HK) gives qualifying SME corporate customers a loan application fee refund to encourage SMEs to focus resources on sustainable growth (Lee et al., 2020;Ng & Leung, 2020).

Overview of notable RE incentives in Singapore
As part of its pledges under the Paris Agreement, Singapore has planned to lower its emissions intensity by 36% compared to 2005 levels by 2030 (MOSE, 2021;NCCS, 2022b). The notable renewable incentive tools in Singapore include: Carbon Pricing Act: Singapore levies carbon taxes on factories that release over 25,000 metric tonnes of CO 2 equivalent annually through direct combustion processes under the Carbon Pricing Act 2018 (MOSE, 2019). If a taxpayer has a carbon tax liability, they must buy carbon credits from the National Environment Agency at a set price (currently S$5 per carbon credit) and then turn in those credits to the agency (MOSE, 2019). The carbon tax will be raised gradually in the coming years, reaching $25/tCO 2 in 2024 and 2025, $45/tCO 2 in 2026 and 2027, and between $50 and $80/tCO 2 by 2030 (NCCS, 2022a).The phased approach to increasing the carbon tax highlights Singapore's commitment to reducing emissions through a price mechanism.
RECs: To provide uniformity in the trading and administration of RECs, Singapore's Standards Council and Enterprise Singapore, along with the National Environment Agency and the Energy Market Authority, released SS 673: Code of Practice for RECs 1 in October 2021. The guidelines provide comprehensive information on the creation, use, and lifetime of RECs for RE claims in Singapore. While these guidelines are still entirely optional, they do increase investor confidence in RECs.
Green Investment: Singapore's central bank unveiled a USD 2 billion green investment programme in November 2019 with the aim of positioning Singapore as a leader in green finance in the Asian region (Khalil et al., 2022). In addition, it has collaborated with seven other monetary authorities to develop a network dedicated to knowledge transfer in green finance. OCBC Bank is also committed to doubling its sustainable financing portfolio to USD 18 billion by 2025 (Azhgaliyeva et al., 2020;Kapoor et al., 2021;Shan et al., 2020), further contributing to Singapore's green finance goals.

Taxonomy of policies
The policy taxonomy presented in this article is based on a breakdown of solutions for achieving carbon neutrality. The achievement of carbon neutrality is fundamentally dependent on a country's ability to transition from a predominantly fossil-fueldependent economy to one that is powered by sustainable energy. The cost efficiency of RE in comparison to fossil energy is at the core of this change, which can be accomplished in two parallel ways: first, by increasing the cost of using highemission technology, such as fossil-fuel-based and energy-intensive technologies; and second, by lowering the cost of using low-carbon and renewable technology. Negative externalities arising from high-emitting technology should be internalised and charged for making them uneconomical, and the cost of low-carbon technologies should be significantly reduced by increasing market size, subsidising positive externalities, and promoting technological innovation and advancement, among other measures.

3
Advancing 'Net Zero Competition' in Asia-Pacific under a dynamic… The policies used a variety of approaches to balance the cost-effectiveness of high-emission and environmentally friendly technology. These methods can be divided into the following six groups based on their effectiveness in achieving diverse solution paths: (1) regulatory reform, (2) market-based mechanisms, (3) commercialisation mechanisms, (4) financial/fiscal mechanisms, (5) governance mechanisms and (6) direct investment. Figure 1 provides detailed information on these six primary categories, including first-level subcategories deriving from these six fundamental categories as well as their functioning principles in matching the breakdown of a carbon-neutral solution. Further information on second-level subcategories and specific policy types can be found in Fig. 2. The three-level taxonomy hierarchy is built by referring to Peñasco et al. (2021), Robinson et al. (2017) and the Asian Development Bank (2021, p. 1).
The policy mechanisms corresponding to the red areas (regulatory reform and market-based mechanisms) in the figure price the social cost of carbon emissions, which takes into account the cost of negative externalities associated with carbon emissions in the prices of goods, services and production activities. Regulatory reform refers to changes made to existing regulations or the creation of new regulations aimed at reducing emissions released into the environment. It mandated changes in fuel consumption patterns and, in turn, raised the relative price of fossil fuels (Samuel, 2021;Steenkamp, 2021;Trisolini, 2019). The goal of these reforms is to achieve a reduction in emissions by setting more stringent standards and providing more effective enforcement and punishment (Bąk et al., 2021;Bovera & Lo Schiavo, 2022;Larionova, 2021;Ren et al., 2020). Market-based mechanisms, such as trading systems and carbon taxes, can be considered a special type of regulatory reform (Klenert et al., 2018;Koch et al., 2014). It is often implemented through regulatory means, such as laws and regulations, to establish the cap and the rules for trading, as well as to ensure compliance and enforcement. However, we separate it from regulatory reform because it uses market forces and provides a flexible, costeffective way to create financial incentives for companies to reduce their emissions by establishing a limit or 'cap' on the total amount of emissions that can be released and then allowing companies to buy and sell emissions allowances or credits (Li et al., 2016;Usman et al., 2020;Whitmee et al., 2015).
The term 'commercialisation mechanisms' refers to a type of policy that is used to govern the process of turning new, low-carbon technologies and innovations into marketable products or services, as well as promoting market maturity through international cooperation schemes and outboard demand. Including policies that encourage standardisation of green technology for ease of international market expansion and promoting a set of investment de-risk measures, like providing financial guarantees to investors or creating a favourable insurance scheme for investment, to attract more investment to a green industry by reducing the perceived risk of investing in it (Billson & Pourkashanian, 2017;Fasihi et al., 2019;Hanson et al., 2017;Shahbaz et al., 2021); The financial and fiscal mechanisms aims to address the positive externality of underinvestment in green technology innovation and socially productive activities by ensuring investors higher revenue or lower operating costs. Fiscal policy refers to government spending and taxation, and monetary policy means the management of interest rates and the money supply. Fiscal policy can be used to stimulate economic growth and innovation by increasing government spending or decreasing taxes, which can lead to more consumption and business investment; while financial policy, on the other hand, can lower interest rates to stimulate economic growth by making borrowing cheaper (Marecki et al., 2022;Marino & Tebala, 2022;Olteanu & Fichter, 2022;Zetzsche & Anker-Sørensen, 2022). These could comprise direct subsidies or disguised subsidies for renewable energy-based electricity (FiTs, for example), tax allowances for companies or in forms of purchase tax exemption for consumers' low-carbon product purchases, 2 and granting a belowmarket rate of interest for the purchase or installation of certain goods and services in line with low-carbon transitions (Debbarma & Choi, 2022;Kubín et al., 2022;Larsen, 2022); Direct investment is a government-led approach in which funds are allocated directly to specific projects, companies or organisations (Cardoso et al., 2020;Costello et al., 2009;Erdogan, 2021;Neves et al., 2020). It often takes the form of purchasing and providing direct R&D investment to support the development or deployment of RE technologies at an early stage and to kick-start the market; Governance mechanisms evaluates a company's operations using a set of standards that encourage investment in socially conscious businesses and promote climate justice. This mechanism also aims to bridge social finance with green asset investment. Environmental, social, and governance (ESG) criteria are representative of socially conscious investors screening potential investments. Other supportive policies include disclosure requirements for data on an organisation's environmental and social performance, enabling investors to make more informed judgments by identifying corporations that may pose a risk or perform poorly due to sustainability or ESG failings (Liao et al., 2021;Maehara et al., 2022;Shankar, 2022).

Policy screening and categorisation
The core concept of the methodology in this article is to match bottom-up screened policy data with top-down built category hierarchy instead of a unidirectional classification process for a more rigorous and reasonable result.
Database Collection and Selection: Collecting the policy database in two steps: first, an extensive search will be conducted on the official websites of the central administrative agencies in Hong Kong, Singapore and Japan. Secondly, this research will look for additional policies cited by those already found until no new policy can be obtained. Crawl central government websites for government documents with 'keywords' in the title using the Scrapy framework. The keywords used for searching policy literature include 'carbon neutrality' and its synonyms, 'energy transition' and its synonyms, and other key technologies related to energy transition according to the list built by the International Energy Agency (IEA, 2021). A total of 364 policies have been collected. Through the reading of each item, a total of 255 policies that fit within the requirement (policies' goal is to increase the use cost of high emissions technologies or decrease the use cost of low carbon and renewable technologies) were selected for continuing analysis (76 of Hong Kong, 73 of Singapore and 106 of Japan). All policies and sources are summarized in "Supplementary material".
Clustering and Matching: The second is to determine the types of policies, cluster them and match them to standardised policy instrument sets, identified as RPS, regulation on tariff/grid laws or deregulation on energy projects, pollution control, limitations on energy efficiency, carbon tax, carbon pricing and emissions trading schemes, green certificates, insurance, loan guarantees, green equity, different types of tax allowances, loans, bonds, public investment, subsidies, grants, FiT, unified ESG criteria, etc. The matching procedure strictly adheres to the definition of the three-level category hierarchy in Sect. 1 and the definitions of climate policy instruments from the International Energy Agency (IEA, 2022), the Organisation for Economic Co-operation and Development (OECD, 2021) and the World Bank (World Bank, 2017) were also referenced. Figure 2 conceptualises the methodology of the article in the preceding text.
Descriptive Statistics: According to the category and its definition above, Fig. 3 counts the total number of policies in each category for Hong Kong, Japan and Singapore. In Hong Kong, policies are distributed as follows: category-regulatory reform accounts for 23.7% of the total, compared to 25.5% in Japan and 13.7% in Singapore; category-market-based Mechanisms account for 1.3% of the total, which consist of the lowest proportion of all policy categories in Hong Kong, compared to 8.5% in Japan and 8.2% in Singapore; category-commercialisation mechanisms accounts for 9.2% of the total, compared to 17% in Japan and 23.3% in Singapore; category-financial/fiscal mechanisms accounts for 34.2% of the total, compared to 33% in Japan and 17.8% in Singapore; category-direct investment accounts for 26.3% of the total, compared to 11.3% in Japan and 20.5% in Singapore; Governance Mechanisms make up a smaller proportion of all policy categories in Japan, with only 4.7%, compared to Hong Kong, where they make up 5.3% and Singapore, where they make up 16.4% of all policy categories. An observation can be made on the basis of the statistics in Fig. 3: Japan and Hong Kong have implemented policies that aim to balance the cost of RE while also regulating the behaviour of producers. They achieve this through regulatory control and the use of emission standards. Both countries also set mandatory regulations on corporate information disclosure to guide investment flow in the capital market. These policies are designed to effectively mature and commercialise the green energy market and to lower investment costs and risks.
Japan's policy approach focuses more on the commercialisation mechanism to promote market maturity. They achieve this by creating outbound demand and supply to lower construction and technology risks and increase revenue certainty. On the other hand, Hong Kong gives more attention to positive usages and direct investment, such as purchasing and direct R&D investment, to support the development or deployment of RE technologies and kick-start market growth.
Japan's focus on the commercialisation mechanism suggests that its RE market is more evolved than Hong Kong's. This is because government policies to attract or support direct investment are usually implemented in the early stages of RE technology research and application.
Singapore has a more balanced policy tool strategy that includes financial and fiscal instruments as well as commercialisation mechanisms. However, compared to Japan and Hong Kong, Singapore's financial and fiscal instruments are much lower, while its commercialisation mechanisms are significantly higher. This could be related to Singapore's projected posture as an international commercialisation hub (Hille et al., 2020;Polzin et al., 2019).
Overall, the policy approaches of Japan, Hong Kong and Singapore could offer us valuable insights into how to balance the cost of RE while promoting its maturity and commercialisation. Table 2 shows the statistical result of policy distribution in Hong Kong, Japan and Singapore according to the taxonomy described above. Policy frequency is represented in both figures and colours. The brighter the colour, the denser the policy distribution in the corresponding block. The detailed explanations and discussion are presented as the following sub-sessions:

Hong Kong
Fiscal/financial mechanisms, direct investment and regulatory reform are the main supportive mechanisms in Hong Kong (34.2%, 26.3% and 23.7%, respectively).
In the fiscal/financial mechanism, 'subsidies schemes' constitute a much higher proportion than other policy instruments, with a particular focus on supporting large-scale RE infrastructure deployment and restructuring as well as offering grants for small-scale RE facilities, such as those in car parks or residences. Tax schemes and financing schemes also play an important role, making up 19.3% and 23.1%, respectively. Tax allowances, including tax deductions and rebates in corporate income tax, are used to incentivise companies to invest in RE, while financing supports, such as green bonds, provide financial support to RE projects.
Direct investment, which accounts for 26.3%, includes government procurement and R&D funding. The Hong Kong government is actively involved in direct government procurement to help kick-start the RE market and expand related services, such as procuring a service that operates green minibus routes and a service for the installation of electric vehicle chargers. In addition, the Hong Kong government Although regulatory reform comprises a high proportion of Hong Kong's policy package, it has not embraced enough impressive policy instruments when compared to Japan and Singapore, especially when taking the category of 'market-based mechanisms' as a special type of regulatory reform. Both regulatory reform and market-based mechanisms are being implemented to charge for energy-intensive technologies and emissions. Typical instruments prevalent within these two categories include RPS, carbon taxes, tradable green certificates (or RECs in some countries), and emerging emission trading schemes (ETS), where the first three have higher mandatory requirements than the latter. Among these, the Hong Kong government only introduced tradable green certificates in 2019 as part of its long-term efforts to reduce carbon emissions; Japan has implemented all four of these policy instruments; and Singapore has implemented a carbon tax and RECs at the same time. In the field of regulatory reform, Hong Kong places a greater emphasis on pollution limitation and reduction by amending pollution control regulations and incentivising pollution recycling. The Hong Kong government has released multiple 'Clean Air Plans' since 2013, with the latest plan covering strategies to combat air pollution across several industries, from power plants and transportation to non-road mobile machinery. When it comes to pollution control subsidies in the financial/fiscal mechanisms, this is a clear indication of the Hong Kong government's vision to achieve emissions reductions through waste management. By regulating private sector pollution practices from both the controlling and incentive sides, the government is working to achieve its goals. In terms of pollution recycling, the Hong Kong government places great importance on its connection with RE generation, such as waste-to-energy (WTE) projects. The government has also introduced policies on energy project deregulation to encourage the private sector and the community to invest in distributed RE.
Overall, the Hong Kong government's policies and support mechanisms for RE put carbon emissions reduction and overall environmental quality improvement in the same sequence while simultaneously promoting the application of sustainable technology.

Japan
In Japan, fiscal/financial mechanisms, regulatory reform, and commercialisation mechanisms are the main supportive mechanisms (33.0%, 25.5% and 17.0%, respectively); direct investment also constitutes a relatively high proportion at 11.3%.
The main supportive measures under fiscal and financial mechanisms are tax schemes, financing schemes and subsidy schemes. In comparison to Singapore and Hong Kong, Japan has a very comprehensive tax incentive scheme that includes corporate income tax deductions or exemptions, accelerated depreciation for the installation of RE, and various kinds of tax credits like R&D tax credits, production tax credits and investment tax credits. These tax incentives enable taxpayers to take larger deductions and pay smaller tax bills throughout the lifetime of an RE investment.
Japan also emphasises green loans instead of green bonds in terms of its financing scheme. In December 2021, the Bank of Japan (BoJ) launched a climate changerelated lending programme that provides zero-interest finance to lenders supporting projects such as RE. Under the scheme, financial institutions are required to cooperate in information disclosure (in the category of regulatory reform) on governance, strategy, risk management, metrics and targets as in the guidelines from the Taskforce on Climate-related Disclosures (TCFD). Subsidy schemes in Japan include subsidies or grants, tendering and auctions, with a focus on large-scale RE generation and storage projects (in contrast to Hong Kong, which also funds small-scale RE facilities).
In the field of regulatory reform, Japan has likewise adopted a very comprehensive policy approach that includes pollution-related measures (pollution recycling and energy efficiency standards) targeting the industrial sector, as well as policies aimed at securing grid access and supply stability for RE. These policies include act on stable energy supply and demand structure and acts on resilient and sustainable electricity supply systems.
For commercialisation, Japan places high stress on international market cooperation (11 policies), which are basically expansion-oriented, with technology standardisation encouragement as supportive measures and insurance scheme establishment to de-risk transnational investment. Regarding direct investment, the government has mainly focused on R&D funding, covering the full life cycle of technology development and pilot demonstration. Market-based mechanisms are not a dominant part of Japan's RE policy mix; however, carbon taxes and an emissions trading scheme continue to be major components of Japan's emission-control efforts. Many studies concluded that the use of carbon tax would not significantly affect the Japanese economy, and it has proven effective in allocating revenue from the carbon tax to subsidising green energy technologies and reducing other taxes (Gokhale, 2021), thus forming an integral part of Japan's tax incentive portfolio. ETS include two regional emission trading systems, Tokyo and Saitama, and a subsidy-based voluntary emissions trading scheme (Kojima & Asakawa, 2021).
In conclusion, Japan has a comprehensive set of policies and mechanisms to support the development of RE projects. The government's emphasis on tax incentives, green loans, and subsidies, as well as its comprehensive approach to regulatory reform and commercialisation, highlights its commitment to promoting the use of RE and achieving its emission reduction targets.

Singapore
Singapore has identified commercialisation mechanisms, direct investment, and fiscal/financial mechanisms as its main supportive mechanisms, with commercialisation mechanisms being the highest at 23.3%, followed by direct investment at 20.5% and fiscal/financial mechanisms at 17.8%. The governance mechanisms have a significantly higher proportion of policy instruments at 16.4% compared to Hong Kong and Japan.
Based on a pragmatic view of the current state of energy production in Singapore, where demand for renewable electricity grows much faster than renewable capacity growth on the island because of finite land space, Singapore places a high priority on international cooperation (commercialisation mechanisms) and energy importing to support its emission goals. Singapore's partners for international cooperation include countries with an equal or higher degree of photovoltaic potential than it but lagging behind its development, for example, Indonesia. This implies that Singapore may conduct technology transfer with its leading know-how in solar photovoltaics (PV) while buying RE generated by PV from the lagging country.
In the area of direct investment, Singapore and Hong Kong share a similar policy mix strategy but differ in their R&D funding strategies. While Hong Kong focuses on RE technology, Singapore mainly pays for industry efficiency innovation and guides SMEs to adopt digital technology. Subsidies and grants (for storage infrastructure, restructuring, etc.) are the main forms of financial/fiscal mechanisms in Singapore. The scope of the subsidy mainly concerns vehicle charging infrastructure and PV systems. However, there is a dearth of preferential taxation schemes and market-based subsidy tools compared to Hong Kong and Japan.
It is also worth noting that Singapore has set up a high number of policies to limit energy inefficiency, particularly in the category of regulatory reform, where they have applied a variety of measures such as Minimum Energy Performance Standards (MEPS), Mandatory Energy Labelling (MEL) and Energy Efficiency National Partnership (EENP) plans across multiple sectors. These policies have played a significant role in reducing energy consumption and promoting sustainability in the country. Additionally, Singapore has taken significant steps to reduce carbon emissions through the implementation of a carbon tax. In 2022, the carbon tax rates were revised to increase from S$10 to S$15 per tCO 2 e by 2030 in the previous version (US$7 and US$11) to between S$50 and S$80 by 2030 (US$36 and US$68), which is significantly higher than that of Japan.
The proportion of Singapore's policies in this block is significantly higher than that of Japan and Hong Kong, despite the fact that the number of policies related to governance mechanisms in Singapore is not higher than that of policies in other categories when compared horizontally with Japan and Hong Kong. Singapore has made significant efforts in the governance mechanisms category, particularly in establishing an independent green taxonomy system, 3 improving the quality of sustainability data disclosure and availability, 4 and guiding capital flow by requesting financial institutions take environmental risk into portfolio consideration. 5 These policies have enabled Singapore to be more effective in introducing green capital, 3 On 28 January 2021, the Singapore government implemented a green taxonomy system for classifying activities as green (environmentally sustainable), amber (in transition), or red (harmful) depending on their contributions to climate change mitigation, similar to the taxonomy being created in the EU. On 12 May 2022, it also provided granularity to the application and thresholds for activity classification to enhance the green taxonomy system. 4 The Singapore government has made efforts to improve the quality of sustainability data disclosure under Project Greenprint, a set of technological applications to maintain the provenance of ESG certifications and company data across several industries as well as ensure availability to different users. 5 The Singapore government requests that financial institutions, including banks, insurers and asset managers, set targets to address environmental risk and take these exposures into their portfolios. which has been a challenge for Hong Kong despite adopting the EU-China Common Ground Taxonomy (CGT) to make its taxonomy internationally comparable and interoperable, particularly considering the lack of ESG data availability has made it challenging for them to adopt the CGT (2022). On the other hand, Japan significantly lags behind Singapore and Hong Kong in terms of green taxonomy, and the contribution of subsidised and financed activities towards Japan's carbon neutrality target of 2050 remains unclear.
In conclusion, Singapore has made great efforts to reduce energy inefficiency, combined with the implementation of a carbon tax and significant efforts in the governance mechanisms category, which will help to define clear policy objectives and expectations and ensure that incentives and financing measures are directed towards sustainable activities that contribute to the achievement of the country's carbon neutrality targets.

Discussion based on policy toolkit comparison
A comprehensive and perhaps disruptive policy package is necessary for the deep decarbonisation of our economies. The existing literature evaluating the technical and socioeconomic outcomes of policy instruments used to support the transition to low-carbon economies is not easily accessible and lacks a comparative angle with contradictory findings. This article aims not to discuss whether a particular type of policy is effective in promoting such a transformation; rather, we hope to provide a comprehensive discussion of the existing policy landscape for the energy system designed by policymakers in Hong Kong, Japan and Singapore to achieve carbon neutrality. To accomplish this, we developed and applied a taxonomy framework to systematically review the various policy packages implemented in these three regions, as well as the implicit transformation path choice underlying each policy combination.
Generally speaking, a policy instrument or mechanism refers to a tool that policymakers and other governmental authorities can employ to address a social problem or accomplish a public goal. This may involve traditional tools like 'commandand-control' regulations (e.g. prohibition of coal-fired thermoelectric plants) and newly devised obligations such as carbon pricing and trading systems, in addition to softer instruments aimed at reshaping behaviour and shifting technology. Alejandro (2019) posits that softer instruments encompass supply-pushing strategies to 'push' technologies into the market through direct investment or intervention and demandpushing strategies to create markets for technologies through production tax incentives or financing loans. Each of them, both traditional and new policy instruments, is essentially based on 'hard constraints' to regulate or shape producer or consumer behaviour or 'soft incentives' for free market forces to work. Several factors, such as political culture, economic structure and institutional setting, can play an important role in affecting the composition of the carbon neutrality policy toolkit.
Considering so, this section hopes to further discuss whether different institutional settings will lead to differential results in the combination of regulatory-type and market-type instruments and the distribution of policies in the three regions based on the dimensions of 'degree of regulation' and 'degree of free market'. The results are presented by the quadrant distribution of policies with four different dimensions, as shown in Fig. 4. The top left is a summary of the policy categories created in the previous section arranged in two dimensions (regulation and free market); the top right, bottom left, and bottom right are the distribution of policies in Hong Kong, Japan and Singapore, respectively. The results show that although Hong Kong, Japan and Singapore are all considered a mixture of East and West with a long-lasting emphasis on the free market, they differ in the specific design and architecture of the policy instruments employed to fulfil their respective carbon neutrality pledges. We present differences in the number of instruments used in the combined regulatory-market category (quadrant 1), the high regulatory-low market category (quadrant 2) and the low regulatory-high market category (quadrant 4).
Japan has more high-regulation and low-free-market policy tools than Hong Kong and Singapore. Singapore has a policy with a high free-market degree and a low regulatory degree, but it lacks a balance of policy tools with a high free-market degree and a high regulatory degree. Hong Kong's policy usage is balanced, with varying degrees of a free market and regulatory freedom. In addition, Japan's economic system is characterised by strong government intervention in certain areas and a relatively low degree of freedom for market forces. This is reflected in the government's implementation of various policies and regulations aimed at promoting economic growth and development, particularly in the areas of infrastructure, energy and technology, as well as in the government's management of various sectors such as healthcare, education and social security.
Singapore, on the other hand, has a relatively high degree of autonomy for businesses and market forces, with a focus on attracting foreign investment and promoting a business-friendly environment. The government has implemented various policies and regulations to promote economic growth and development, but it lacks a balance of policy tools that allow for both market freedom and market regulation.
Hong Kong, on the other hand, has a balance in policy usage with different degrees of a free market and regulatory freedom. The government has a relatively low degree of intervention in the economy, with a focus on maintaining a businessfriendly environment and a relatively low tax rate. Hong Kong's economy is heavily reliant on international trade and investment, which are supported by its advanced infrastructure and communication systems. However, it also has certain regulations that are put in place to maintain stability and safety in the economy.
Overall, the political systems and economic policies of Japan, Singapore and Hong Kong are different and reflect their unique economic and political histories. Each country has its own approach to governance and regulation that reflects its specific economic and social characteristics.

3 6 Conclusions and implications
This paper conducted a comparative study of carbon neutrality policy instruments in Japan, Singapore and Hong Kong SAR, China, and further examined policies in six categories that support carbon neutrality and compared them based on political economy and market features.
In summary, Hong Kong has taken active measures to expand the deployment of RE through a variety of policy instruments. The government is financing novel RE technology in the research, development and pilot demonstration phases. Despite these efforts, however, Hong Kong lags behind Japan and Singapore in the implementation of widely used mechanisms such as carbon taxes and RPS, which can raise the price of energy-intensive technology and emissions. Waste management is the Hong Kong government's primary focus for reducing emissions. The government is also placing great importance on the connection between waste recycling and RE generation, as evidenced by its WTE project. However, the government is also aspiring to become a future centre for green finance and an entry point for financial flows between mainland China and the rest of the world. While it has made efforts in this regard, Hong Kong currently trails behind Singapore according to our policy toolkit comparison.
Japan's policy mix for promoting RE is extensive and diverse. The country has utilised various tax incentive policies to de-risk companies and encourage their transformation into green businesses. Additionally, Japan provides long-term, zerointerest loans to projects that contribute to emission reduction and specific funding for green technology that covers nearly every stage of the new technology life cycle. These incentive measures have been much more extensive than those implemented by Hong Kong and Singapore. As an industrial power, Japan has also implemented control-oriented policies to regulate emissions and efficiency, as well as to maintain a robust and sustainable electricity supply system. However, despite recognising the importance of developing a corporate environmental risk information disclosure system and setting guidelines for governance, risk management, metrics and targets, Japan's regulators have been hesitant to align with international green finance standards. This lack of alignment may create uncertainty about how the country's many incentives and funded policy measures, as well as their subsidised activities, will contribute to Japan's carbon neutrality target. Moreover, Japan currently lacks a green taxonomy to differentiate sustainable activities. This lack of taxonomy could further obscure the impact of Japan's policy mix on its carbon neutrality goal. Without clear guidelines for what constitutes a sustainable activity, it may be challenging to attract investors to green projects or to assess the potential risk of investment. Therefore, Japan may need to establish a standardised system of green taxonomies aligned with global standards to ensure the transparency and accuracy of the impact of its policies towards achieving carbon neutrality.
Singapore, recognising the limitations of its own RE potential, has adopted a strategy that focuses on limited support for the deployment of indigenous RE infrastructure. Instead, the government has placed priority on international cooperation in terms of technology transfer and energy imports to support its emission goals. Singapore leads in solar PV, and it is leveraging this expertise in technology transfer to accelerate the adoption of solar energy in other countries. However, the limited support for the deployment of indigenous RE infrastructure may hinder Singapore's ability to achieve its emissions goals in the long term. Thus, the government needs to consider the potential benefits of investing in local RE infrastructure and incentivising private sector investment in this area. In terms of emission controls, the Singaporean government relies heavily on the carbon tax, which sends a strong price signal and puts pressure on businesses and individuals to lower their carbon footprints. While Singapore does not have preferential taxation systems or marketbased subsidy measures to encourage private sector investment in RE, it has made significant efforts in green taxonomy to differentiate sustainable activities and to ensure that subsidised production and consumption activities are genuine and not just 'greenwashing'.