The following sections analyse progress made in four key policy areas underpinning the transition to green growth. Section 4 discusses Japan’s use of environmentally related taxes, other market-based instruments and subsidies to create market signals that could encourage more environmentally friendly decisions. Section 5 presents the evolution of public and private expenditure to control and abate pollution. Section 6 presents the trends on environment- and climate-related innovation activity through patent counts, and assesses the role of public policy in determining such trends.