One way to reduce fossil fuel in products is to, as suggested by The Swedish Sustainable Economy Foundation, introduce a progressive tax and dividend on fossil fuel.
It works like this: all import or production of fossil gets a levy on it as it enters the economy. This levy increases with time, and will not stop increasing until the goal of defossilizing the economy is met. This is a market solution where the market is expected o offer cheaper, non-fossil options. It is expected the amount of the levy will be passed on to consumers, so they will see products that need fossil input for production use, or both, get more expensive. This will favour products that have no or little fossil content.
At the same time, partly to give the mechanism popularity and partly for equity reasons, the collected levy is divided equally among citizens. This means that those who buy few products with fossil in them will be premiered, and find a net increase in their spending power. Those who buy a lot of fossil product will be paying relatively more.
To illustrate how the mechanism might work, we produced a simple simulation in the Minsky software.
Do watch the video (12 minutes) to see for yourself. It is clear that the mechanism will work to increase the relative price of fossil products, that as the market responds other interventions might be needed. Because of this, Tax and Dividend is not an introduce and forget kind of mechanism, but one that needs careful monitoring of how the market is responding.
It has the advantage of being fairly simple, clear, and offering some form of fairness where those who buy fossil products are the greatest contributors to their transition.
Stephen Hinton Consulting 