Theoretical frameworks and empirical studies are introduced to understand policy instruments for environmental protection and energy security. The effects of environmental policy on industrial competitiveness are explored with implications for the current discussions on how to achieve green growth. The principles of energy and environmental policies are discussed, drawing on historical developments as well as contemporary cases. Policy instruments including command-and-control, tax, subsidy and emission trading, are evaluated through empirical examination of past experiences in different countries and industrial sectors. Systemic approaches to designing and implementing policies for energy and environmental innovation are explored.