States on Steroids: The Continuing American Climate

Odyssey

States on Steroids: The Continuing American Climate

Odyssey

Barry G. RabeUniversity of Virginia/Brookings Institution

October 18, 2008Carbon Pricing & Environmental Federalism

Conference—Queen’s University

Barry G. RabeUniversity of Virginia/Brookings Institution

October 18, 2008Carbon Pricing & Environmental Federalism

Conference—Queen’s University

The Conventional Wisdom about American Climate Policy

The Conventional Wisdom about American Climate Policy

Post-Kyoto, America the EVIL EMPIREPost 2008 election, All will Change

Post-Kyoto, America the EVIL EMPIREPost 2008 election, All will Change

Signs that Rip Van Winkle is Awakening in Washington

Signs that Rip Van Winkle is Awakening in Washington

Courts are handing down decisions

EPA is blocking state action

2005, 2007 Energy bills PACKED with incentives and subsidies for every form of energy

Congress is talking—a lot

Courts are handing down decisions

EPA is blocking state action

2005, 2007 Energy bills PACKED with incentives and subsidies for every form of energy

Congress is talking—a lot

Congressional Hearings on Environmental Policy

5 2 2 2 1 2

1724

2017

8

24

1612

914

148

0

20

40

60

80

100

120

140

160

94th (1975-1976)

95th (1977-1978)

96th (1979-1980)

97th (1981-1982)

98th (1983-1984)

99th (1985-1986)

100th (1987-1988)

101st (1989-1990)

102nd (1991-1992)

103rd (1993-1994)

104th (1995-1996)

105th (1997-1998)

106th (1999-2000)

107th (2001-2002)

108th (2003-2004)

109th (2005-2006)

110th (2007-2008)

But the real action remains in the statehouses

But the real action remains in the statehouses

Renewable Portfolio StandardsCap-and-Trade ProgramsEndorse California Waiver on

VehiclesPublic Benefit FundsGovernors as Climate Superheroes

Renewable Portfolio StandardsCap-and-Trade ProgramsEndorse California Waiver on

VehiclesPublic Benefit FundsGovernors as Climate Superheroes

Renewable Portfolio Standards

Renewable Portfolio Standards

Regional InitiativesRegional Initiatives

Vehicle Greenhouse Gas Emissions Standards

Vehicle Greenhouse Gas Emissions Standards

Public Benefit FundsPublic Benefit Funds

Lessons from the StatesLessons from the StatesFraming allows tailored strategies:

-Localized climate concerns-Localized economic development

opportunities-Localized concerns about energy

costs/reliabilityPotential advantages from early-actionPotential rent-seeking opportunitiesCredit-claim and blame avoidance

converge (2050?)-Agency entrepreneurs yield to large

coalitions

Framing allows tailored strategies:-Localized climate concerns-Localized economic development

opportunities-Localized concerns about energy

costs/reliabilityPotential advantages from early-actionPotential rent-seeking opportunitiesCredit-claim and blame avoidance

converge (2050?)-Agency entrepreneurs yield to large

coalitions

More Lessons from the States

More Lessons from the States

Policy adoption inverse to expert opinionEverybody loves regulation (RPS can be

sold anywhere)Cap-and-trade occupies a middle groundCarbon taxes off-limits, except in stealth

form (PBF)States generally providing the blend of

policies the public wants

Policy adoption inverse to expert opinionEverybody loves regulation (RPS can be

sold anywhere)Cap-and-trade occupies a middle groundCarbon taxes off-limits, except in stealth

form (PBF)States generally providing the blend of

policies the public wants

The Day After Enactment: Can Climate Policy be ImplementedThe Day After Enactment: Can

Climate Policy be ImplementedConventional Wisdom: Market-based

policies self-implement once pols have courage (Sulfur dioxide)

Experience to date: Vastly more complex, even when political will and administrative capacity are highMissed deadlinesMissed targetsAdministrative conflict/chaosConstant threat of litigation

Conventional Wisdom: Market-based policies self-implement once pols have courage (Sulfur dioxide)

Experience to date: Vastly more complex, even when political will and administrative capacity are highMissed deadlinesMissed targetsAdministrative conflict/chaosConstant threat of litigation

Cap-and-Trade: Tales of RGGI

Cap-and-Trade: Tales of RGGI

Optimal circumstances: Broad political support and unusual partnering between environment and energy ministries

Experience: Four years of hard negotiations

Offsets, Safety-Valves, Auctioning , Rebates all REMAIN contentious

The real issue of leakageThe lack of FIT with other programs (RPS)The periodic threat of secession

Optimal circumstances: Broad political support and unusual partnering between environment and energy ministries

Experience: Four years of hard negotiations

Offsets, Safety-Valves, Auctioning , Rebates all REMAIN contentious

The real issue of leakageThe lack of FIT with other programs (RPS)The periodic threat of secession

RPS: The Good, Bad & Ugly

RPS: The Good, Bad & Ugly

Some big success stories: TexasSome big problems:

Hubris (California)Defining renewables (Pennsylvania)Hoarding benefits within stateGreater costs/Fewer benefitsSiting and NIMBY concerns

(Massachusetts)Transmission Warfare among proponents of various

renewables

Some big success stories: TexasSome big problems:

Hubris (California)Defining renewables (Pennsylvania)Hoarding benefits within stateGreater costs/Fewer benefitsSiting and NIMBY concerns

(Massachusetts)Transmission Warfare among proponents of various

renewables

Carbon TaxesCarbon Taxes

The Consensus among Policy Wonks

The pressure to CUT gasoline taxesFraming: Public Benefits

Funds/Social Benefit ChargesThe Chris Dodd Profile in Courage

Award

The Consensus among Policy Wonks

The pressure to CUT gasoline taxesFraming: Public Benefits

Funds/Social Benefit ChargesThe Chris Dodd Profile in Courage

Award

Trying to do it ALL: California

Trying to do it ALL: California

Politicians of all parties/units racing to top to be a WORLD CLIMATE LEADER

California trying to do everything—sans carbon tax

Huge implementation challengesCompeting agencies (CARB, CEPA, CEC,

CPUC…)Push-back against cap-and-trade (“More Wall

St…”)Limited ability to control neighborsPolicies lose allure as costs

increase/deadlines near

Politicians of all parties/units racing to top to be a WORLD CLIMATE LEADER

California trying to do everything—sans carbon tax

Huge implementation challengesCompeting agencies (CARB, CEPA, CEC,

CPUC…)Push-back against cap-and-trade (“More Wall

St…”)Limited ability to control neighborsPolicies lose allure as costs

increase/deadlines near

The 44th President and the 111th Congress

The 44th President and the 111th Congress

Can Climate Compete Against Other Issues?

Can Congress Govern the Climate?Can EPA Govern the Climate?Can we create new Climate

Institutions (ironically, using Federal Reserve Board as a model)?

Can Climate Compete Against Other Issues?

Can Congress Govern the Climate?Can EPA Govern the Climate?Can we create new Climate

Institutions (ironically, using Federal Reserve Board as a model)?

And what about Federalism?

And what about Federalism?

Half a nation: Actively engaged

Half a nation: Essentially disengaged

American federalism: Badly broken, now more than ever

Half a nation: Actively engaged

Half a nation: Essentially disengaged

American federalism: Badly broken, now more than ever

Table 1. State Climate Policy Adoption and Greenhouse Gas Emission Trends

Emission Growth Trends (1990-2005)

High (>16%) Low (<16%)

Arizona New Hampshire Colorado New Jersey Illinois Oregon Iowa Rhode Island Maine Utah Maryland Vermont Minnesota Washington Montana Wisconsin Nevada

California Connecticut Delaware Hawaii Massachusetts New Mexico New York Pennsylvania Texas

Alabama North Carolina Alaska North Dakota Arkansas Oklahoma Florida South Carolina Georgia Tennessee Idaho Virginia Mississippi Missouri Nebraska

District of Columbia Indiana Kentucky Louisiana Michigan Ohio South Dakota West Virginia Wyoming

High 12-20

policies

Low 0-11

policies

Levels of State Climate Policy Adoption

Table 1. State Climate Policy Adoption and Greenhouse Gas Emission Trends

Emission Growth Trends (1990-2005)

High (>16%) Low (<16%)

Arizona New Hampshire Colorado New Jersey Illinois Oregon Iowa Rhode Island Maine Utah Maryland Vermont Minnesota Washington Montana Wisconsin Nevada

California Connecticut Delaware Hawaii Massachusetts New Mexico New York Pennsylvania Texas

Alabama North Carolina Alaska North Dakota Arkansas Oklahoma Florida South Carolina Georgia Tennessee Idaho Virginia Mississippi Missouri Nebraska

District of Columbia Indiana Kentucky Louisiana Michigan Ohio South Dakota West Virginia Wyoming

High 12-20

policies

Low 0-11

policies

Levels of State Climate Policy Adoption