Belfer Center Home > Publications > Academic Papers & Reports > Discussion Papers > Interactions between State and Federal Climate Change Policies

EmailEmail   PrintPrint Bookmark and Share

 
"Interactions between State and Federal Climate Change Policies"

"Interactions between State and Federal Climate Change Policies"

Discussion Paper 2010-36, Harvard Project on International Climate Agreements, Belfer Center for Science and International Affairs, Harvard Kennedy School

June 2010

Authors: Lawrence Goulder, Robert N. Stavins, Albert Pratt Professor of Business and Government; Member of the Board; Director, Harvard Project on Climate Agreements

The Harvard Project on Climate Agreements Discussion Paper Series

Belfer Center Programs or Projects: Harvard Project on Climate Agreements

 

ABSTRACT

Federal action addressing climate change is likely to emerge either through new legislation or via the U.S. EPA's authority under the Clean Air Act. The prospect of federal action raises important questions regarding the interconnections between federal efforts and state-level climate policy developments. In the presence of federal policies, to what extent will state efforts be costeffective? How does the co-existence of state- and federal-level policies affect the ability of state efforts to achieve emissions reductions?

This paper addresses these questions. We find that state-level policy in the presence of a federal policy can be beneficial or problematic, depending on the nature of the overlap between the two systems, the relative stringency of the efforts, and the types of policy instruments engaged. When the federal policy sets limits on aggregate emissions quantities, or allows manufacturers or facilities to average performance across states, the emission reductions accomplished by a subset of U.S. states may reduce pressure on the constraints posed by the federal policy, thereby freeing facilities or manufacturers to increase emissions in other states. This leads to serious "emissions leakage" and a loss of cost-effectiveness at the national level. In contrast, when the federal policy sets prices for emissions or does not allow manufactures to average performance across states, these difficulties are usually avoided. Even in circumstances involving problematic interactions, there may be other attractions of state-level climate policy. We evaluate a number of arguments that have been made to support state-level climate policy in the presence of federal policies, even when problematic interactions arise.

 

Lawrence Goulder, Department of Economics, Stanford University; Robert Stavins, Harvard Kennedy School, Harvard University.

 

For more information about this publication please contact the Harvard Project on Climate Agreements Coordinator at 617-496-8054.

For Academic Citation:

Goulder, Lawrence H. and Robert N. Stavins. "Interactions between State and Federal Climate Change Policies." Discussion Paper 2010-36, Harvard Project on International Climate Agreements, Belfer Center for Science and International Affairs, Harvard Kennedy School, June 2010.

Bookmark and Share

SUBSCRIBE

Receive email updates on the most pressing topics in science and int'l affairs.

<em>International Security</em>

The Fall 2014 Issue of the quarterly journal International Security
is now available!

Events Calendar

We host a busy schedule of events throughout the fall, winter and spring. Past guests include: UN Secretary-General Ban Ki-moon, former Vice President Al Gore, and former Russian President Mikhail Gorbachev.