Climate Policy Panel at ACS

On Saturday I participated in a panel on climate change policy, “Environmental Protection in a Climate of Change,” at the American Constitution Society’s National Convention in Washington, D.C.  In addition to yours truly the panel featured Vicki Arroyo of the Georgetown Climate Center, Interior Department Deputy Solicitor Rachel Jacobson, and Andrew Light of the Center for American Progress.  Georgetown’s Lisa Heinzerling, who is currently serving as Associate Administrator of the Environmental Protection Agency for the Office of Policy, Economics, and Innovation moderated.  Those hoping for fireworks or a fierce debate were likely disappointed, but I think the panel was informative and (I hope) insightful.  The video is available here.  Additional thoughts on the panel are below the jump.

The bulk of the panel consisted of an overview of contemporary climate policy.  Vicki Arroyo began by discussing various state and local climate initiatives, and how these efforts are likely to be affected by various legislative proposals.  Rachel Jacobson followed with a discussion of the Interior Department’s response to climate change as both a land manager and resource agency.  On the one hand, Interior oversees wildlife refuges and other lands likely to be affected by climate change.  On the other, Interior regulates much natural resource development, including most oil and gas extraction and much renewable energy development.  Andrew Light shifted the focus to the international arena, giving a fairly optimistic assessment of climate negotiations and the Copenhagen Accord.  In Light’s view, there are reasonable prospects for a meaningful international agreement on greenhouse gas emissions assuming the U.S. adopts measures to ensure significant near-to-medium term emission reductions.

As should be evident, I was the designated naysayer on the panel.  My remarks focused on 1) current legal issues raised by recent climate initiatives, and 2) the need to shift focus from emission controls to technological innovation.  I opened by noting that many climate-related questions will be resolved in the courts, particularly in the absence of federal legislation.  From the common law nuisance suits in the Second, Fifth, and Ninth Circuits to ongoing preemption and citizen suit litigation, climate change policy is increasingly a question for the courts.

Massachusetts v. EPA did not end climate-related litigation against the EPA. Rather it opened the floodgates.  The EPA now faces challenges from those both opposing and supporting more extensive regulation.  Of particular interest is the litigation challenging the EPA’s “tailoring rule” governing emissions of greenhouse gases from stationary sources under the Clean Air Act.  The relevant provisions of the Act impose permitting and other requirements on facilities that have the potential emit more than 100 or 250 tons-per-year of regulated pollutants.  For traditional pollutants, this threshold results in the regulation of a few thousand facilities.  Applied to carbon dioxide, on the other hand, these thresholds increase the universe of regulated facilities by over 100-fold.  As regulation on this scale would be virtually impossible, the EPA has sought to rewrite the statutory thresholds to 50,000 tons per year.  The agency  seeks to justify this move on grounds of “absurd results” and “administrative necessity,” but these doctrines have never been used to rewrite a clear, numerical statutory requirement in this fashion.  Indeed, the EPA’s disregard of the Clean Air Act’s clear text is more brazen than anything the Bush EPA attempted (and that’s saying something).

The second part of my remarks turned to the big picture of climate policy.  The targets embraced by U.S. policymakers are exceedingly ambitious.  “80 by 50” – an 80 percent reduction in emissions by 2050 – is the official target of choice.  This would require reducing U.S. emissions to what they were a century ago, while accommodating a higher standard of living and much larger population.  On a per capita basis, these targets would require reducing emissions to 1875 levels, or the approximate level of Grenada and Botswana.  This is less than half the per capita emissions of nations like Switzerland and France, which rely far more on hydro and nuclear power than the U.S. does or is likely to in the foreseeable future.  Emission reductions of this magnitude will require dramatic increases in technological innovation, and yet current policies are doing relatively little on this front.

Yet the need for greater technological innovation is even greater.  An individual nation’s emission reductions are not particularly important.  What matters is the overall concentration of greenhouse gases in the atmosphere, and whether they continue to increase.  This means that effective climate policy must focus as much (if not more) on controlling emissions on rapidly industrializing nations, such as China, India, and Brazil, as on the already industrialized world.  And emission controls in these nations will only occur if reducing greenhouse gas emissions becomes much, much cheaper.  China, et al., have made it abundantly clear that they will not sacrifice their economic growth on the altar of global climate control.  The only way to change their minds will be to shrink the size of the required sacrifice, and that will require dramatic innovation.

My final point was that accelerating the rate of innovation in the energy sector requires a different mix of policies than those currently being pursued.  I made my standard pitch for technology inducement prizes and reducing barriers to technological innovation.  I also stressed that pricing carbon does not require the erection of a massive greenhouse gas bureaucracy or a complex, loophole-ridden, cap-and-trade regime, such as that passed by the House last year.  A simple revenue-neutral carbon tax, under which the proceeds are fully rebated to taxpayers (thereby shifting the nation’s tax burden from wages to carbon) would do the trick.

Asked to prognosticate about future policy developments, Andrew Light noted that the Administration’s strategy is to squeak a climate bill through the Senate, drag out the reconciliation process through November’s midterm elections, and then pass the final bill in a post-election lame-duck session.  For my part, I predicted that a meaningful climate bill will not pass Congress this year (though a pork-laden energy bill is possible), and the real question is whether a newly constituted Congress is really to abandon the Beltway class’ obsession with cap-and-trade in favor of more promising policy measures.  (For more on why I believe a carbon tax is preferable to cap-and-trade, see here, here, and here.)