State Climate Policy SolutionsState Climate Policy SolutionsFor a new, stronger, clean energy economyFor a new, stronger, clean energy economy

State Climate Policy SolutionsState Climate Policy SolutionsFor a new, stronger, clean energy economyFor a new, stronger, clean energy economy

NCELNCEL09.08.0909.08.09

K.C. GoldenK.C. GoldenPolicy DirectorPolicy Director

NCELNCEL09.08.0909.08.09

K.C. GoldenK.C. GoldenPolicy DirectorPolicy Director

“We are addicted to oil”

Symptoms:

Economic hemorrhaging: $450 M per month in King County

Fever: increasing average temp is the least of it

“We are addicted to oil”

Symptoms:

Economic hemorrhaging: Over $450 M per month in King County

Fever: increasing average temp is the least of it

Acute national insecurity: “Paying for both sides of the war on terror”

Treatments for addiction• Gas tax holiday: Cheaper drugs• Drilling: Increase the supply of drugs

Quit: Steadily reduce dependence…..

….by building a clean energy economy….

CAP Policy commitment to steadily reduce fossil fuel dependence

…and a platform for launching a green economy

State policies:Climate plans

Maps from Pew Center

State policies:Renewable Portfolio

Standards

State policies:Vehicle GHG Standards

State policies:Commercial energy codes

Cap makes it real:Get your wedge

on!

Key principles for climate policy design

• EFFECTIVENESS

• EFFICIENCY

• EQUITY

Effectiveness - Scale

How much do we have to reduce climate pollution?

Enough to stabilize the concentration of GHGs in the atmosphere “at a level that would prevent dangerous anthropogenic interference with the climate system.”

How much is that?

Avoid increases in average global temperature of > 2 degrees C

How much is that?

Stabilize the concentration of GHGs at 350-450 ppm

So how much do we have to reduce climate pollution?

80% by 2050. More in the U.S.Avoiding Dangerous Climate Change – Cambridge University Press

Effectiveness - Scale

Effectiveness - Build

Effectiveness – Get going!

Efficiency

Equity

Internationally

DomesticallySectors, geographies,industries, economics

Equity – Green for all

Design issuesCap and trade vs. Carbon tax

Effectiveness: Quantity, not price, is the public policy imperative

Trade Tax Standard

s

Incentives

Investments

Design issues -- scope

More is better

• Effectiveness: Reduce more

• Efficiency: liquidity, simplicity

• Equity: not just point sources

Design issues – emission rights

Auction or give away?

• Effectiveness: rewards innovation; facilitates investment, consumer protection• Efficiency: simpler (baselines, early action) • Equity: avoids windfalls; level playing field

Design issues - Offsets

Limit them

• Effectiveness: discourages transformation

• Carbon storage in biomass not equivalent to emission reduction• Efficiency: verification is complex;

“additionality” – critical, but counterfactual• Equity: aggravates environmental justice concerns; intergenerational foul

Cap and trade works for acid rain

Annual Mean Wet Sulfate Deposition

1989-1991 2004-2006

Acid Rain SO2 Program Costs: Much Lower than Originally

Predicted

1990 1994 2004Source: EPA, 2006

Fossil fuel price politics

• Concern that climate policy will raise prices

• But prices are through the roof now!

• Why? Supply and demand.

• What drives the opposition?

It will reduce our consumption of fossil fuels

Public opinion• Public “favors” drilling• But they favor efficiency, renewables,

and climate solutions by wider margins• Bottom line:

Do something!

Why states?“Global” warming is a

local, state and regional issue

State Climate Policy SolutionsState Climate Policy SolutionsFor a new, stronger, clean energy economyFor a new, stronger, clean energy economy

State Climate Policy SolutionsState Climate Policy SolutionsFor a new, stronger, clean energy economyFor a new, stronger, clean energy economy

NCELNCEL09.08.0909.08.09

K.C. GoldenK.C. GoldenPolicy DirectorPolicy Director

NCELNCEL09.08.0909.08.09

K.C. GoldenK.C. GoldenPolicy DirectorPolicy Director