Should Obama Follow Ambitious Recommendations?

The Clean Air Act and new cap-and-trade legislation are both good policy options to address global warming; they can and should be developed simultaneously.

Note: this response was originally posted on the National Journal’s Energy & Environment Blog. You can read the entire post here, including the contributions of other experts.

The Obama Administration absolutely must pursue immediate action on global warming. From both an environmental and an economic perspective, we simply cannot afford to wait any longer; over the last eight years, we have squandered too much of our very limited time. As each successive report emerges from the scientific community, we find ourselves ever closer to irreversible and extremely costly global damages. To take just one example, this last year witnessed the lowest annual Arctic sea ice levels on record. For the first time in recorded history, it is possible to sail around the entire polar ice cap in open ocean—and the entire Arctic may have ice free summers by 2030—with incalculable consequences for global weather patterns.

The cornerstone of action on global warming—as President-elect Obama reaffirmed Tuesday—should be an economy-wide cap-and-trade system, with a long-term target to reduce emissions 80% below 1990 levels over the next four decades. Cap-and-trade will create the price signal that allows markets to respond, and creates critical incentives for clean energy investment, job creation, and entrepreneurship throughout the economy.

However, cap-and-trade alone will probably not be sufficient. We will also need explicit government support for R&D on critical technology and infrastructure, such as carbon capture & sequestration as well as renewable energy. Carbon capture technology in particular faces a daunting array of technical, financial, and regulatory hurdles, putting it decades away from commercial-scale use. But we need solutions to the coal dilemma today. The United States should immediately fund large-scale demonstration projects to accelerate the deployment of carbon capture technology, as well as next-generation renewables such as advanced solar power.

Using the Clean Air Act (CAA) to help control CO₂ pollution is also a sound approach that can work alongside—or in the absence of, should Congress be slow in adopting legislation—a strong cap-and-trade regime. The CAA has a proven record of success (including the SO₂ emissions trading program, which pioneered cap-and-trade) and is already familiar to industry. But it would be only a partial substitute for economy-wide policies, which would create incentives for greater efficiency, and provide R&D funding to lower new technology costs.

Some have suggested that advancing global warming policy under both the Clean Air Act and as separate cap-and-trade legislation will create a so-called regulatory “patchwork,” with multiple policies working at cross-purposes. It is indeed important that policymakers work to harmonize new and existing policies, and streamline requirements where possible. However, this concern can—and often is—managed in both environmental and other arenas. Agriculture, transportation, workplace safety and health policies, to name a few examples, are often subject to the regulations of multiple regulatory agencies at the state and federal levels. In fact, the Clean Air Act itself may contribute to harmonization—in the current system, federal and state partnerships work in tandem to address criteria pollutants, reducing conflicts. While an economy-wide program may result in some degree of regulatory overlap, it need not be problematic, and a new Administration, committed to effective and streamlined climate policy, will be in a position to minimize any such conflicts and take advantage of synergies in multiple policy arenas.

Given the urgency of acting, and the overall scale of the effort required, it seems foolish to waste any policy tool—within the remit of current executive authority or through new legislation—that could usefully contribute to the larger solution we seek.