Conventional approaches to policy design often neglect the plasticity of citizens’ beliefs and values upon which policy effectiveness and political sustainability depend. A consequence, by way of illustration, is that environmental policies may crowd out pre-existing green values. Our representative survey of 3,306 Germans finds that enforced restrictions to promote carbon-neutral lifestyles would trigger strong negative responses because they ‘restrict freedom’. This is true even among those who would adopt green lifestyles when voluntary, thus possibly undermining support for green political movements. These results combined with the long-term political consequences of the polarizing reactions to Covid mandates motivate a new approach to climate policy design. We set aside the conventional economic model assuming self-interested citizens, in which there could be no green values to crowd out. Instead, we propose a dynamic approach recognizing that (1) to succeed, essential policies including bans, carbon taxes and the promotion of new technologies must be both implementable and politically sustainable, entailing (2) a critical role for citizens’ green values, which (3) may be either diminished or cultivated, depending on policy design.