There are several widely recognized tests for determining whether government should intervene in the marketplace. Does the public policy improve efficiency, equity, or stability, or does it pursue widely accepted social objectives? This paper examines the formulation of public policies toward new energy carriers such as hydrogen, in terms of what they ought to be and what they are in actuality. It goes on to examine policy implementation issues, which will be strongly affected by the hydrogen economy's likely development trajectory. Hydrogen, as currently conceived, can be expected to evolve from a local market to a continental market over time, implying that state and local policies will strongly influence its development. The paper closes with strategic policy recommendations