Green industrial policy aims to prioritize environmental sustainability. Which of the following is a typical example?

• A. Subsidies for fossil fuel exploration
• B. Abolishing environmental standards
• C. Tariffs on renewable energy equipment
• D. Subsidies for renewable energy manufacturing

Answer: (D)

Green industrial policy aims to steer industry toward environmental sustainability by using targeted incentives and support to grow clean technologies. Subsidies for renewable energy manufacturing fit this approach because they directly reduce the cost and risk of producing clean-energy equipment at home, encouraging firms to invest in solar, wind, batteries, and related technologies. This helps build domestic supply chains, lowers long-term costs through scale and learning, and accelerates the transition away from fossil fuels. In contrast, subsidies for fossil fuel exploration would reinforce carbon-intensive activity, removing environmental protections would undermine sustainability goals, and tariffs on renewable energy equipment would raise prices and slow the adoption of clean technologies. So subsidizing renewable energy manufacturing is the clear alignment with green industrial policy.