What's Next for Climate Policy?

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A large majority of Americans (77%) now believe that Congress and the president should make climate change a priority. Over the past two years however, discussion about establishing overarching national climate policy has been almost nonexistent.

But then Hurricane Sandy hit, flooding the most populous region of the country and causing $30 billion in damages in the New York area alone. Suddenly, it became clear that ignoring climate change will cost us much more than doing something to address it.

On November 13, 2012, hundreds of economists and policy analysts from across the political spectrum gathered in Washington, DC to discuss an idea that’s gaining momentum at the national level: a carbon tax. As this conversation comes to the forefront once again, we thought it was a good time to review some of the most popular policy tools aimed at helping to curb the fossil fuel pollution that’s overwhemingly contributing to climate change:

Carbon Tax: Recognizing that fossil fuels cost society in the form of health impacts, soldiers killed during fuel transport missions overseas, oil spills, climate change, etc., many economists think it’s a good idea to make sure the price tag of conventional energy reflects those costs. One way to do that is to put a tax on fuels like coal and oil, typically by charging fuel producers a fee per ton of carbon sold. Because those fuels will have a higher sticker price with the tax, renewable energy and efficiency measures will become more cost effective. Norway and British Columbia, Canada, among others, have already implemented a carbon tax.

Cap & Trade: In 2010, the US came very close to passing a cap & trade bill (The American Clean Energy and Security Act) in Congress. Since then, no new market-based solutions for pricing carbon have been put on the table. As the name implies, the policy puts a limit (cap) on the amount of pollution that, for instance, a power plant can emit. If the power plant exceeds that amount they have to buy an “allowance” (trade) from somewhere else in the market (from a less-polluting power plant, for example). Europe and Mexico have well-known emissions trading policies in place, and California just launched its new cap and trade program on November 15.

Renewable Portfolio Standard (RPS): RPS programs are usually implemented at the state or local level. They require utilities to produce a certain percentage of their energy from renewable sources (or offer their customers renewable energy credits). Most states in the US have implemented RPS programs with varying levels of ambition (Colorado, for example has a goal of reaching 30% renewables by 2020 while Oklahoma has an RPS of 15% by 2015). You can see a map of those programs here.

Subsidies and Tax Breaks: Federal, state and local governments have long provided funding to a diverse range of energy programs through a patchwork of subsidies and tax breaks. One such renewable energy program in the news lately is the Wind Production Tax Credit, set to expire at the end of 2012. On the flip side, many environmental groups are calling for the end of subsidies to fossil fuel producers, which get a significantly larger portion of government financial support than renewables do.

Environmental Regulations: The Clean Air Act and Clean Water Act are two of the most well-known environmental regulations in the US. These and other laws tell companies how to safely dispose of chemicals, how many resources may be mined, which plants and animals are off limits for harvesting, etc. During President Obama’s first term, the two climate-related regulations that were passed and got the most attention were new fuel-efficiency standards for vehicles and the EPA’s carbon pollution standards for new power plants and other sources.

If you’re concerned about climate change, you’re probably asking, “Well, which policy is best?” The answer is tricky, because no matter which policy tool is chosen it’s the design and implementation of the programs that’s key. That’s why some environmental groups opposed the American Clean Energy and Security Act: the climate bill they wanted and the one that was proposed were miles apart.

Policies at the international and local level seem to be moving the discussion forward. As more countries and cities make important commitments to fighting greenhouse gas pollution, it becomes more difficult for other regions to delay action.

One of the best ways to help address climate change is to learn about the laws being considered in your community, state and country, and work with your neighbors to advocate for a better future together. Visit the Environmental and Energy and Study Institute and the World Resources Institute to learn more about civic action around climate change.



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luiz antônio faria

Todos esforços para que tenhamos mais qualidade de vida é viável, temos que fazer algo mesmo para que no futuro nossos bisnetos possam viver aqui neste maravilhoso planeta azul.mesmo que não de certo vale a pena tentar.

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