Beyond Cap and Trade

How America can address the climate challenge
In the summer of 2009, the American Clean Energy and Security Act, which included a cap and trade system for regulating carbon emissions, passed the House of Representatives by seven votes. Now, more than a year later, the bill is dead in the Senate; Majority Leader Harry Reid (D-Nev.) bluntly admitted in July, “We don’t have the votes.”
With a polarized electorate and a country emerging from a bruising recession, new climate-change legislation seems unlikely. And many proposed alternatives to cap and trade would not be as effective, and some are even less politically feasible than cap and trade itself. The challenge for climate-change advocates is therefore to convince skeptics, and particularly voters motivated primarily by economic concerns, that the cost of doing nothing about global warming is truly too high.
Local Innovation

Given the overwhelming scientific consensus on climate change and the lack of decisive federal action, it is not surprising that some cities and states have explored alternatives to cap and trade. Daniel Schrag, a professor of earth and planetary sciences at Harvard, noted that some cities and states have taken actions of their own accord, such as California’s Global Warming Solutions Act of 2006 and the U.S. Conference of Mayors’ Climate Protection Agreement. Other potential alternatives to Congressional action include EPA regulation of carbon dioxide emissions and increased government investment in the research and development of clean energy technology.
Each of these options has its supporters. The California-based Apollo Alliance and the Breakthrough Institute have been dedicated investors in clean-energy technology, which has begun to gain traction in the United States. EPA regulation of carbon emissions— ruled constitutional by the Supreme Court in 2007—received little support during the Bush administration, but President Obama has indicated openness to the idea. And from California to Seattle to Fargo, states and cities are independently passing initiatives to promote more efficient energy use. Schrag suggested that these and similar solutions, although small in scale, could contribute to the ultimate goal of reducing net carbon emissions.
The Costs of the Alternatives

The trouble is that these programs generally receive lukewarm reactions from economists, engineers, and climate-change specialists. William Antholis, managing director of the Brookings Institution and a senior fellow in its Governance Studies program, told the HPR that approaches like increased R&D funding and local action “are neither sufficient nor efficient” in addressing America’s contribution to climate change. The general consensus on these alternative policies—particularly direct regulation by the EPA—is that, although helpful, they often cost much more per unit of carbon than market-based policies like cap and trade.
Harvard economist and Cato Institute senior fellow Jeffrey Miron believes that EPA regulation would be “the worst of all possible worlds,” because it lacks cap and trade’s concern for preserving a vibrant market. But policies less economically onerous than direct regulation lack the explicitness and enforceability, Miron said, that would make them effective at a national level.
Convincing the Skeptics

If the effectiveness of most alternatives to cap and trade is somewhat questionable, the political feasibility of some these policies is even less impressive. The failure of the American Clean Energy and Security Act reflects the reality of what Antholis called a “constricted political system,” in which every one of these alternatives “will become a political battleground.” Furthermore, Miron noted a general skepticism regarding the importance of addressing climate change, if not about its very existence. “There’s certainly lots of skepticism about how negatively it’s going to affect human welfare, and therefore there is some caution… about whether we really need a carbon tax,” he said.
Despite the defeat of cap and trade and the difficulties associated with pushing alternative solutions, it is possible for supporters of climate-change legislation to remain optimistic. As Antholis pointed out, political cycles “come and go and come again.” The public is generally more receptive to environmental measures during economic boom years, which of course the last few years have not been. If scientists can find still more convincing evidence of the adverse effects of climate change, Congress may yet be spurred to action. Schrag is also “still an optimist,” although he too noted the importance of the public’s coming to understand the effects of climate change. If Congress is ever to perceive a clear mandate for change, advocates of action will have to first convince the public of its basic necessity.
Matthew Bewley ’14 and Toni Campbell ’13 are Contributing Writers.