Towards a Federal Climate Policy

The case for a clean energy future remains strong. There are six major policy options to address the challenges of climate change:

  • Voluntary Emission Reduction is one approach where businesses voluntarily agree to reduce their greenhouse gas (GHG) emissions. From 2002 to 2011, EPA's Climate Leaders program worked with companies to develop comprehensive climate strategies and commitments to reduce their GHG emissions.
  • Research & Development (R&D) is needed to develop new non-carbon energy technologies to reduce GHG emissions. The American Recovery and Reinvestment Act (ARRA) included about $63 billion targeted for energy, transportation, and climate research spending. In addition, Advanced Research Project Agency – Energy (ARPA-E) would finance high-payoff, high-risk projects to help push for the development of new energy technologies that could radically alter how we get energy.
  • Command and control policy approaches has traditionally been used to regulate pollutants. Regulation is currently used to regulate GHG emission from very large new or modified sources under the New Source Review (NSR) program requiring use of Best Available Control Technologies (BACT). In addition, EPA has proposed New Source Performance Standards (NSPS) for GHG emissions from new power plants. Click here for the latest overview of EPA's recent relevant air pollution regulations.
  • Cap and trade is a market-based policy option that limits the emissions of GHGs. Cap and trade is used in state and regional climate change programs and formed the basis of the Congressional proposal in the Waxman-Markey American Clean Energy and Security Act of 2009 (H.R. 2454 of the 111th Congress).
  • Carbon Tax is a market-based policy option that sets a price on carbon, thereby monetizing the external costs of those emissions. A number of countries and regions have implemented carbon taxes or energy taxes that are related to their carbon content.
  • Clean Energy Standard (CES) is a market-based policy that requires electric utilities to supply a specific portion of their electricity from qualified, clean energy sources. A CES builds on the electricity portfolio standards already in 31 states and the District of Columbia.

In addition, the Center has produced several resources to aid policymakers in the design and development of comprehensive climate and energy legislation, as well as a quick reference guide for federal climate policy.