This brief describes issues relevant to the timetable for reducing U.S. emissions of greenhouse gases (GHGs) under a cap-and-trade program. The first issue is whether reductions are sufficiently deep to have a meaningful effect on the global climate. Scientific evidence suggests that global reductions of 50 to 85% by 2050 are needed to avoid the most serious consequences of climate change, and policymakers need to decide what share of the global emission reduction burden will be shouldered by the United States. Second, while existing technologies can be used to make significant near-term emission reductions, new technologies will be needed to achieve deep long-term reductions. Policymakers can stimulate technology development with a sufficiently stringent timetable that covers several decades. Cost minimization is the third issue. Many existing technologies can be used to reduce emissions almost immediately at little cost. However, in some capital-intensive situations, such as a major change to a factory’s production process, costs may be reduced if emission reduction requirements can be matched with the natural lifecycle of the equipment or similarly, if firms and consumers have time to adjust purchasing patterns to reflect higher prices for GHG-intensive goods. Fourth, when it comes to the mechanics of setting a reduction timetable, policymakers must specify not only the start and end dates for the reduction pathway, but also the target for each intervening year. Given the environmental importance of cumulative emissions, less aggressive near-term action will necessitate deeper reductions in later years. Policies enacted by others suggest a blended strategy: near-term reduction targets based on technical feasibility and long-term targets based on environmental objectives. Finally, while a multi-decade emission reduction timetable will provide regulatory certainty, enhance innovation, and minimize cost, the reality is that new scientific, technical, or economic data may necessitate changes to the timetable. Policymakers need to manage the trade-off between long-term predictability and the flexibility to adapt to new information.
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