Climate Compass Blog

States should explore carbon pricing to encourage clean power

C2ES President Bob Perciasepe moderates a Solutions Forum panel with (l to r): Martha Rudolph, Director of Environmental Programs, Colorado Department of Public Health & Environment; David Paylor, Director, Virginia Department of Environmental Quality; and Janet Coit, Director, Rhode Island Department of Environmental Management.

States will have tremendous flexibility to choose how to reduce their carbon emissions under the Clean Power Plan, and one idea they should explore is putting a price on carbon.

The Center for Climate and Energy Solutions (C2ES) recently brought together legal and economic experts, state environmental directors, and business leaders to explore the potential to use market mechanisms to reduce these damaging emissions efficiently and cost-effectively.

Here are three key insights from this Solutions Forum:

States can learn from each other on carbon pricing

As discussed at our C2ES Solutions Forum on Carbon Pricing & Clean Power, both power companies and states see advantages to using carbon pricing, such as a cap-and-trade program, to reduce carbon emissions under the Clean Power Plan.

For companies, rather than being forced into specific measures to cut emissions, a carbon price harnesses market innovation to find the most cost-effective solutions. Meanwhile, states can draw on the experiences of existing cap-and-trade programs in California and the nine-state Regional Greenhouse Gas Initiative (RGGI).

While the advantages of market-based approaches are widely acknowledged, some stakeholders are concerned that the Environmental Protection Agency’s (EPA) timeline would make it challenging to develop a cap-and-trade program. EPA proposes giving states until summer 2016 to submit a plan. States could apply for a one-year extension or, if submitting a plan as part of a multistate collaboration, a two-year extension.

How culture shapes the climate change debate

I have an in-law who is, shall we say, rather skeptical about climate change. Any discussion on the topic usually begins with some contrarian science theory that he heard on one of his favorite talk shows (e.g. sun spots, deep ocean magma, urban heat islands), and then devolves from there.

Why do some Americans believe the antithesis of the scientific consensus on issues like climate change?

This topic is explored by Professor Andy Hoffman of the University of Michigan in his new book, How Culture Shapes the Climate Change Debate. As suggested by the title, Hoffman’s thesis – a distillation of considerable research from social scientists over the past several years – is that the public’s understanding of climate change, like other historically contentious issues such as evolution, acid rain, the ozone hole, and genetically modified food – is as much a cultural issue as a scientific one.

One of the key arguments is that a scientific consensus does not necessarily reflect a “social consensus,” the latter being something that the majority of society would consider to be true.  For instance, the scientific consensus that cigarettes harm human health emerged decades before the social consensus emerged.

World economy grew, but carbon emissions didn't

In a sign that low-carbon policies may finally be gaining traction, global carbon dioxide (CO2) emissions leveled off last year even while the world economy grew.

Preliminary data from the International Energy Agency (IEA) indicate that energy-related CO2 emissions (from burning fossil fuels for electricity, transportation, industry, space heating and so on) remained unchanged from the previous year at 32.3 billion metric tons. Meanwhile, economic growth increased 3.3 percent.

One year’s data doesn’t necessarily translate into a trend. Even with much stronger efforts, it will be some time before we can truly announce that we have turned the corner on reducing carbon dioxide emissions. But 2014 is notable in that it’s the first time since the IEA was established in the early 1970s that a levelling off or a drop in global carbon emissions didn’t accompany an economic downtown.

Historically, energy-related CO2 emissions have moved in lockstep with economic growth. They’re being decoupled due to policy changes and market forces affecting two factors – energy intensity and fuel mix – both in China and in the developed economies.

US climate target encourages others to put best foot forward

I recently wrote a piece for China Dialogue about the US announcement of its intended contribution to a new international climate agreement due this December in Paris. Here is that article:

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The US pushed strongly for getting climate targets on the table well ahead of this year’s Paris negotiation, arguing that exposing countries’ offerings to a bit of scrutiny would encourage them to “put their best foot forward.”  With the formal submission of its intended target, the Obama administration arguably has done just that.

The US contribution is, for the moment, only a declaration of intent. But by coming out early with the strongest target it believes it can muster, the White House has charted an ambitious course at home. And it is upping the pressure on China and other major economies to do the most that they can too.

The end result, hopefully, is a new agreement in Paris that not only pulls all these numbers together, but also holds countries accountable for their promises, and commits them to keep returning to the table in the years ahead to assess and strengthen their efforts.