This report analyzes the prospects of state efforts to address climate change by looking at a range of case studies to determine what characteristics of state policy innovation may be indicators of successful federal adoption.

Key Findings

  • The support and encouragement of state champions promoting their own standards as well as broader federal action may have the most impact on vertical policy diffusion. States should invest in communications programs to allow state experts to speak in public forums and provide testimony on state policy goals. In particular, states should advocate for the preservation of their ability to implement policies that can reduce GHG emissions.
  • The quick development and implementation of state policies will allow any lessons learned to be used in the federal effort. State policy action taken today is more likely to inform and shape the federal outcome rather than the other way around, posing a potential advantage for early actors.
  • Research on spillover effects of climate policies may generate enthusiasm for a federal program and are likely to be more effective if married to state advocacy efforts. States should disseminate analyses, modeling results, forecasts, and actual program data related to their climate policies and programs.
  • Programs with wider state diffusion were more likely to be adopted at the federal level. State policies should therefore be designed with a view to interstate cooperation, sharing of information, and the incremental development of multi-state collective action. The efforts for broader adoption of RGGI and the California standards are examples of this.
  • Some measure of business support is helpful at any level of policy development but is not always critical to vertical diffusion. States should promote and convene business coalitions that share their policy goals in an effort to help design or endorse policies.

Executive Summary

The United States federal government is lagging behind other industrialized countries in developing policies to address climate change. At the same time, however, many U.S. states are seeking to implement aggressive, mandatory emissions controls.

To understand the state-federal relationship and its implications for climate change policy in the United States, we reviewed eleven successful and two unsuccessful instances of policy diffusion from the state to the federal level, known as vertical diffusion. In addition, we looked specifically at two state/regional policy initiatives that will likely impact federal policy: the Regional Greenhouse Gas Initiative (RGGI), and the California vehicle emissions standards.

Based on these cases, we identified seven factors related to the successful vertical diffusion of policy, and analyzed the cases from the perspective of those factors:

  1. Policy learning (states as laboratories)
  2. Available cost data
  3. Spillover effects on surrounding states
  4. Horizontal policy diffusion to other states
  5. Federal assistance
  6. Business support for federal action
  7. Push for diffusion by state champions

The most important factors appear to be "Push for diffusion by state champions," closely linked to the "spillover effect." The existence of a strong spillover effect coupled with state advocacy appears to be sufficient to catalyze vertical diffusion even without the widespread horizontal diffusion. "Policy learning" is also important. However, "Cost data" does not seem to be a significant factor, perhaps because cost was not an issue, data were unavailable, or federal policymakers considered the data irrelevant.

Foreword by Jonathan Lash

Some years before I had the privilege of leading the World Resources Institute, I served as Secretary of Natural Resources for the state of Vermont. I had come to that post after several years of prodding, praising, and occasionally suing the federal environmental bureaucracy in Washington, DC. In Montpelier, it quickly became clear to me that to try new and creative approaches to solving environmental problems, state government was the place to be. Today, after many more years in Washington, my appreciation for the innovative capacity of state governments has been repeatedly confirmed.

America has a long and inspiring tradition of policy innovation and activism that is incubated at the state level. The states often take to the front lines of cutting-edge policy development, creating fresh and inventive programs to address the concerns and needs of their constituents.

From standards for organic agriculture, to removing asbestos from schools, to creating enterprise zones, and reducing acid rain pollution, the states have shown a path forward and provided both the problem-solving acumen as well as the pressure to induce the Federal government to act.

Of all the environmental problems now confronting this nation and the rest of the world, none holds greater potential for irrevocable and destructive disruption to our lives than climate change. Yet, up to now, our national government has failed to respond with initiatives appropriate to what looms ahead.

The most significant first steps designed to measure and control the emission of greenhouse gases have come from an impressive number of states in this country. Ten states in the Northeast, seven in the West, and several in the Midwest are in the process of implementing mandatory programs to measure and reduce greenhouse gas emissions.

And not surprisingly, as well, is the fact that over 100 cities have gotten on board, to one degree or another, taking concrete steps to reduce their contribution to climate change or to add their political clout to efforts to spur the national commitment needed to help catalyze essential international compacts.

This timely report documents state efforts now underway to address the problem of climate change and our contribution to it. It puts them into the historical context of previous initiatives by states to lead our country in making difficult but necessary national decisions.

Just as there is no “silver-bullet” technology that will solve climate change, there is no “silver-bullet” policy either. The commitment to policy innovation by U.S. states may prove to be the wellspring from which we build the low-carbon economy of the future.

I take great comfort in that we have not lost our willingness and ability as a people to challenge and lead, no matter from what level of government we may start. That is, really, what this report is all about. I hope you enjoy it, and are inspired by it.

Jonathan Lash