U.S. States & Regions
States and regions across the country are adopting climate policies, including the development of regional greenhouse gas reduction markets, the creation of state and local climate action and adaptation plans, and increasing renewable energy generation. Read More
Market Mechanisms: Understanding the OptionsApril 2015
Climate change poses a significant risk for a broad range of human and natural systems. Policies to reduce emissions are critical if we are to avoid the most costly damages associated with a rapidly changing climate. Compared to traditional command-and-control regulations, market-based policies can more cost-effectively reduce greenhouse gas (GHG) emissions by creating financial incentives for GHG emitters to emit less. Ten U.S. states and many jurisdictions outside the United States have established market-based programs to reduce GHGs. Market-based policies would be among the options available to states to reduce GHGs from power plants under the U.S. Environmental Protection Agency’s proposed Clean Power Plan. This brief describes the theory behind market-based approaches; their success in cost-effectively reducing GHGs and other emissions; and a range of market-based options, including: a carbon tax, a cap-and-trade program, a baseline and credit program, a clean or renewable electricity standard, and an energy efficiency resource standard.
Progress on a multifaceted global challenge like climate change doesn’t happen in one flash of bright light. This can lead to the impression that little is being accomplished, especially when stories highlight areas of disagreement.
Nothing can be further from the truth. In reality, progress is more like the brightening sky before dawn. We saw positive steps in 2014, and they’ll help lay the groundwork for significant climate action in 2015 in the United States and around the world.
In the U.S., we will see the EPA Clean Power Plan finalized and states taking up the challenge to develop innovative policies to reduce harmful carbon dioxide emissions from power plants. Allowing governors to do what they do best, innovating at the state level, will be a key achievement of 2015.
Internationally, more countries than ever before will be putting forward new targets for reducing greenhouse gas emissions ahead of talks in December in Paris to hammer out a climate pact to replace the Kyoto Protocol.
In the New Year, we will be building on solid progress made in 2014 by governments, businesses, and individuals. Here are 10 examples:
Kyle Aarons speaks at a one-day program in San Francisco intended to provide participants with an in-depth examination of how the California carbon markets are developing and how potential long-term goals and federal regulation are impacting the market.
Date: Thursday, June 26, 2014
Time: 8 a.m. - 5 p.m., PDT
Location: Marriott Union Square in San Francisco, CA
Judging from the climate policy debate in Washington, one might conclude that carbon pricing is only a concept, or something being tried in Europe.
But in fact, 10 U.S. states (California and the Northeast states in the Regional Greenhouse Gas Initiative) have carbon trading programs. That means more than a quarter of the U.S. population lives in a state with a price on carbon. And a growing number of nations and provinces around the globe are turning to carbon pricing to cost-effectively reduce greenhouse gas emissions and encourage energy innovation.
E&E TV, April 10, 2014
As President Barack Obama prepares to deliver his State of the Union address, we believe it’s a good time to take a look at the state of our climate: the growing impacts of climate change, recent progress in reducing U.S. emissions, and further steps we can take to protect the climate and ourselves.
The consequences of rising emissions are serious. The U.S. average temperature has increased by about 1.5°F since 1895 with 80 percent of this increase occurring since 1980, according to the draft National Climate Assessment. Greenhouse gases could raise temperatures 2° to 4°F in most areas of the United States over the next few decades, bringing significant changes to local climates and ecosystems.
In the year since California launched the nation’s largest greenhouse gas cap-and-trade program, the state has proven that climate change action can be led by states and can even spread across national borders.
Under a cap-and-trade system, companies must hold enough emission allowances to cover their emissions, and are free to buy and sell allowances on the open market. Since California held its first auction of carbon allowance credits on Nov. 14, 2012, the California Air Resources Board (CARB) has auctioned roughly 64.4 million allowances valued at $780 million. Through the smooth operation of its auctions and sales of 100 percent of 2013 allowances to date, California has demonstrated its capacity to successfully administer a cap-and-trade program.
California does not have the first emissions trading program in the United States, although it’s certainly the most ambitious. The multi-state Regional Greenhouse Gas Initiative (RGGI) was the pioneer, but California’s cap-and-trade program is more substantial due both to the size of state’s economy and the number of sectors covered. By 2015, California’s program will expand to be about twice as large as RGGI.
The leaders of California, Oregon, Washington, and British Columbia have agreed to promote policies and regulations to reduce greenhouse gas emissions and foster a low-carbon economy.
The Pacific Coast Action Plan on Climate and Energy they signed Oct. 28 represents a nonbinding commitment to align regulations and market-based measures in each jurisdiction. The plan promotes clean energy deployment, carbon pricing, revised greenhouse gas reduction targets, research on ocean acidification, and low-carbon transportation. Several provisions highlight the need for regional cooperation to reduce greenhouse gas emissions, such as those supportive of a high-speed regional rail line and an integrated electrical grid. Finally, the plan calls for a coordinated approach to U.S. and international climate negotiations, and each jurisdiction has agreed to participate in a subnational coalition to secure a broader climate agreement at Conference of Parties to the UNFCCC in Paris in 2015.
The collective size of the parties to this agreement should send a powerful signal that state and provincial governments are willing and able to address climate change. The agreement was developed through the Pacific Coast Collaborative (PCC), which also includes Alaska. The PCC has a population of 53 million and a combined gross domestic product of $2.8 trillion. If it were a country, the PCC would have the fifth largest economy in the world.
Since the agreement is nonbinding, legislative and executive action is needed for real progress to be made. To date, the parties have made varying levels of progress in climate and clean energy policy. British Columbia has had a revenue-neutral carbon tax in place since 2008, as well as a clean fuel standard for transportation. California has been using a variety of policy tools to fight carbon emissions, especially since the passage of its Global Warming Solutions Act in 2006. One element, the cap-and-trade system, has imposed a price on carbon since the beginning of 2013. Oregon and Washington have agreed to put a price on carbon, but each will require new laws to do so. Legislative efforts in both states to put a price on carbon failed in 2009, but both governors are making a renewed push. Governor Inslee in Washington has directed a working group of state legislators to propose carbon-trading legislation by December 2013. In Oregon, Governor Kitzhaber’s administration has been working to implement its 2012 10-Year Energy Action Plan, which includes the state’s greenhouse gas goals.
C2ES: California Cap and Trade
Pacific Coast Collaborative: Home Page
LA Times: Gov. Jerry Brown signs clean energy pact with two states, Canadian province
AP: West Coast States and BC to Link Climate Policies
When I founded a new nonprofit organization 15 years ago, the United States and the world urgently needed practical solutions to our energy and climate challenges. That need has only grown more urgent.
Earlier today, I announced my plans to step aside as the President of the Center for Climate and Energy Solutions (C2ES) once my successor is on board. As I look back, I find we have come a long way. That said, any honest assessment of our progress to date in addressing one of this century’s paramount challenges must conclude that we have much, much further to go.
When our organization, then named the Pew Center for Global Climate Change, first launched in 1998, 63 percent of the world’s electricity generation came from fossil fuels. Incredibly, that number is even higher today – 67 percent. The concentration of carbon dioxide in the atmosphere, the main driver of climate change, is also higher than it was then – in fact, at its highest level in more than 2 million years.
Scientists around the globe have just reaffirmed with greater certainty than ever that human activity is warming the planet and threatening to irreversibly alter our climate. Climate change is no longer a future possibility. It is a here-and-now reality. It’s leading to more frequent and intense heat waves, higher sea levels, and more severe droughts, wildfires, and downpours.
We at C2ES have believed from the start that the most effective, efficient way to reduce greenhouse gas emissions and spur the innovation needed to achieve a low-carbon economy is to put a price on carbon. It’s a path that a growing number of countries, states, and even cities are taking.