To reach a low-carbon economy in the Netherlands, the level of greenhouse gases (GHG) emissions has to be reduced by 80–95% CO2 emissions compared to 1990 (223.1 MtCO2-equivalents). This study aims to address how investment subsidies combined with carbon levies could be deployed to support technological mitigation options to achieve a low-carbon economy in the Netherlands in 2050. A system dynamic model has been built including demographic-economic, energy and environmental sub-systems of the Netherlands. The model has been validated with earlier projections of the EU for the energy and climate policy in 2050. Next to the business-as-usual scenario, there are four policy scenarios simulated from 2010 to 2050. In all policy scenarios a carbon levy was imposed on non-renewable energy to finance subsidies on mitigation options. Results show that imposing subsidies on the mitigation option renewable energy is most effective in combination with the carbon levy