Implementation of Climate Change Mitigation Policies

The Role of Government in Fueling Climate Change Mitigation

The maxim that economies naturally adjust themselves to changing environments faster than government policy, that the "market" will self-regulate, simply is not the case. Because of unpriced externalities, because many think the effects are relegated to the future, because it makes more sense to create returns in the here-and-now, the "market" has not delivered anything resembling adequate change.[1][2] Until such factors are taken into consideration, which will not naturally happen within the necessary timeframe, it will be unprofitable to redevelop entire industries into sustainable ones. This is where the government comes in, and it has a series of options when it comes to encouraging sustainable, environmentally-conscious operations:

Carbon Tax/Price on Carbon

Brown Coal Power Plant (figure i)

Renewable Energy Subsidies

Wind Farm in the Flint Hills (figure ii)

Renewable Energy Mandates

EV Charging Station in Portland (figure iii)

Putting a Price on Carbon

The policy often cited as the most efficient way to combat climate change works to price in the unpriced externalities that give oil and gas such an unfair advantage. A carbon tax would subject individuals and/or corporations " to pay taxes equivalent to the per-ton fee times their total emissions" that their local governing body assigns.[3] In doing so, clean and sustainable energy sources would appear significantly more favorable due to their lower operating costs. There is also an alternative form of a carbon tax called a cap-and-trade system where "laws or regulations would limit or ‘cap’ carbon emissions from particular sectors of the economy (or the whole economy) and issue allowances (or permits to emit carbon) to match the cap."[4] Companies can then trade carbon allowances, so companies that have more sustainable operations would be able to add a revenue stream selling their allowances to companies that have not renovated their operations. In either case, the cost per ton of carbon would gradually increase (and the allowance set in a cap-and-trade system would decrease) as economic sectors improve their sustainability operations and as total global emissions continue to rise, ensuring that industries would continue to improve their sustainability practices.[5]

Christine Lagarde (see right, figure iv), the managing director and chairwoman of the International Monetary Fund (IMF) (see right, figure v), regards a price on carbon as "the single most effective mitigation instrument" governments have in the face of climate change due to how it "provides across-the-board incentives to reduce energy consumption, use cleaner fuels, and mobilize private finance."[6] The IMF says that a carbon price of $35 per ton or below "would be sufficient to meet [current carbon emission reduction pledges] for the G20 countries, which together account for four-fifths of global emissions."[7] Such a price would also only increase gasoline prices by "5 to 7" percent. However, these pledges would only limit global temperatures to 3°C above pre-industrial levels, above the 2°C spelled out in the Paris Agreement and well above the 1.5°C recommended by the IPCC.[8] To meet the 2°C target, the IMF recommends a global price of $70 per ton—something that would vary between countries.[9]

It should also be noted that the World Bank (see right, figure vi)has similarly endorsed a carbon price as the best way "to capture what are known as the external costs of carbon emissions – costs that the public pays for in other ways, such as damage to crops and health care costs from heat waves and droughts or to property from flooding and sea level rise – and tie them to their sources through a price on carbon."[10]

The IPCC itself has offered several options in regards to carbon pricing. "Assuming global implementation of a mix of regionally existing best-practice policies (mostly regulatory policies in the electricity, industry, buildings, transport and agricultural sectors)" and carbon pricing of $5 to $20 (in 2010 USD) per ton in 2025 and an average price of $25 by 2030, global CO2 emissions would be reduced "by an additional 10 [gigatons of CO2] in 2030."[11] Additionally, a mix of stringent energy efficiency policies (e.g., minimum performance standards, building codes) combined with a carbon tax" of $10 per ton in 2020 to $27 per ton in 2040 would be "more cost-effective than a carbon tax alone" of $20 to $53 per ton "to generate a 1.5°C pathway for the U.S. electric sector."[12] That does not, however, take into account the required carbon pricing for the entire world to meet the IPCC's 1.5°C targets.

Christine Lagarde, Managing Director of the IMF (figure iv)

The Logo of the IMF (figure v)

The Logo of the World Bank (figure vi)

Percent CO2 Reduction Below Baseline in 2030

IMF: The effects of a $70 carbon tax (red) compared to a $35 carbon tax would be significantly and especially pronounced in places where fuels such as coal are in use. However, its impacts would differ from country to country, requiring carbon prices to be adjusted individually. (figure vii)

The Politics of a Carbon Tax

All that being said, while a carbon tax would be the most economically efficient way to go about climate change mitigation, it is far from the most politically efficient. When the French government proposed a new fuel tax as part of the nation's transition towards clean energy, people under the banner of the 'yellow vests' or gilets jaunes protested in Paris (see right, figure viii).[13] In the Fall of 2018, Washington, one of the more environmentally progressive states, voted down "Initiative 1631, a proposed carbon [tax] on fossil fuels."[14] All of this points to recognizing "potential equity implications [such as] the regressive impact of [marginally-higher fuel prices] or potential energy price increases on low-income households" as they are often the most vulnerable in the face of added taxes while also being the least able to change their energy consumption habits due to that underlying requirement of initial capital.[15] Another issue surrounding carbon pricing is the potential "economic hardship to workers and communities dependent on fossil fuel industries for livelihoods" unless the government takes action to invest specifically in those communities.[16]

There are some actions that can be taken to make a carbon price more politically favorable. For one, "gradually phasing in[...]carbon pricing and explicit communication on the use of the associated revenue" could make the general public more receptive to such policies.[17] Another would be for governments to enact a "revenue-neutral tax-subsidy [or general stipend] scheme to provide further incentives for cleaner power generation" while balancing the impacts on individual households.[18]

However, the simple nature of a "technocratic mechanism" such as a carbon tax "[doesn't] inspire people" and is "easy to caricature as big-government bureaucracy."[19] The fears surrounding carbon taxes are also driven more by "the perceived price increases" over "the actual price increases [the policies] would inflict on families."[20] All of these issues are difficult to overcome, especially when such policies would require majority support from the House of Representatives, the Senate, and the President if they were ever to be enacted in the United States.

Gilets Jaunes Protest the French Government's Proposed Fuel Tax in Paris (figure viii)

The Cover of the New York Times Magazine's Climate Issue, The Problem With Putting a Price on the End of the World (figure ix)

Governor Jerry Brown Signs California's Clean-Energy Mandate (figure x)

Governor Andrew Cuomo of New York (figure xi)

Governor Jay Inslee Signs Washington's Clean-Energy Mandate (figure xii)

Subsidies, Mandates, and Government Investment

Carbon pricing tries to bring the costs of fossil fuels at or beyond that of renewable energy, factoring in their environmental and health effects.[21] However, subsidies and clean-energy mandates "try to play[...]down [the differences] and instead emphasize the benefits of less pollution" that come from renewable energy sources.[22] These alternatives "are less efficient than carbon pricing," for "they don't necessarily affect the entire economy," but they still have the ability to create widespread adoption of renewable energy with popular support if applied properly.[23]

For one, clean-energy subsidies work to decrease the price manufacturers and producers need to sell their products/services in order to make a profit. In doing so, it becomes significantly more economically viable to not only purchase solar energy or electric cars but to produce them as well. Pairing subsidies with clean-energy mandates are also extremely effective because they provide a goal and the means to achieve it.[24][25] Clean-energy mandates such as those recently enacted by California, New York state, and Washington state are legally-binding goals that require a certain percentage of power to be generated by renewable sources by a given year.

California has mandated that the state generate 50% of its power from renewable energy sources by 2025, 60% by 2030, and be 100% "zero-carbon[...]by 2045" which can be achieved using nuclear energy.[26]
New York's 'Reforming the Energy Vision' mandates that "50% of [the state's energy needs] to come from renewable sources by 2030" with the goal being 70%.[27]
Washington's clean energy bill requires that "by 2025, [the state] must completely get rid of coal power," by 2030, the state needs to be 100% carbon neutral "[leaving] room for nuclear, natural gas with CCS, or other nonrenewable, non-carbon-emitting sources," and by 2045, the state has to exclusively generate power from clean-energy sources.[28]

Pay particular note as to how Washington state was able to pass a clean-energy mandate bill in comparison to the carbon tax that failed earlier.

The combination of infrastructure spending, economic development, and "environmental protection is a winning political strategy."[29] That much is clear. By lowering the costs of renewable and clean-energy sources instead of "[raising] the cost of fossil fuel," the government can grow the economy, lessen the negative impact on individuals, and protect the world from a future disaster.[30] We will not be able to escape the effects of climate change, but every step the world can make towards a more sustainable economy will save billions and protect society from the worst climate change has to offer.[31]

Sources:

David Leonhardt, "The Problem With Putting a Price on the End of the World," The New York Times Magazine, last modified April 9, 2019, accessed May 13, 2019, https://www.nytimes.com/interactive/2019/04/09/magazine/climate-change-politics-economics.html?mtrref=news.google.com.
Barron, "How Big Business," The New York Times Magazine.
Union of Concerned Scientists, "Carbon Pricing 101," Union of Concerned Scientists, accessed May 13, 2019, https://www.ucsusa.org/global-warming/reduce-emissions/cap-trade-carbon-tax.
Union of Concerned Scientists, "Carbon Pricing," Union of Concerned Scientists.
Ibid.
Christine Lagarde and Vitor Gaspar, "Getting Real on Meeting Paris Climate Change Commitments," IMF Blog, last modified May 3, 2019, accessed May 13, 2019, https://blogs.imf.org/2019/05/03/getting-real-on-meeting-paris-climate-change-commitments/.
Lagarde and Gaspar, "Getting Real," IMF Blog.
Ibid.
Ibid.
The World Bank, "http://www.worldbank.org/en/programs/pricing-carbon#CarbonPricing," The World Bank, accessed May 13, 2019, http://www.worldbank.org/en/programs/pricing-carbon#CarbonPricing.
IPCC, "Mitigation Pathways Compatible with 1.5°C in the Context of Sustainable Development," IPCC Special Report, last modified October 2018, accessed May 24, 2019, https://www.ipcc.ch/site/assets/uploads/sites/2/2019/02/SR15_Chapter2_Low_Res.pdf.
IPCC, "Mitigation Pathways," IPCC Special Report.
Colin Kinniburgh, "Climate Politics after the Yellow Vests," Dissent Magazine, last modified March 2019, accessed May 25, 2019, https://www.dissentmagazine.org/article/the-yellow-vests-uncertain-future.
Hal Bernton, "Washington state voters reject carbon-fee initiative," Seattle Times, last modified November 7, 2018, accessed May 25, 2019, https://www.seattletimes.com/seattle-news/politics/voters-rejecting-carbon-fee-in-first-day-returns/.
Union of Concerned Scientists, "Carbon Pricing," Union of Concerned Scientists.
Ibid.
Lagarde and Gaspar, "Getting Real," IMF Blog.
Ibid.
Leonhardt, "The Problem," The New York Times Magazine.
Ibid.
Ibid.
Ibid.
Ibid.
Robert Kuhn, "Public and Private Environmental Policies," e-mail message to author, May 22, 2019.
Telukuntla and Niemczyk, interview by the author.
Camila Domonoske, "California Sets Goal Of 100 Percent Clean Electric Power By 2045," NPR, last modified September 10, 2018, accessed May 25, 2019, https://www.npr.org/2018/09/10/646373423/california-sets-goal-of-100-percent-renewable-electric-power-by-2045.
New York State, "Reforming the Energy Vision," last modified 2019, accessed May 25, 2019, https://rev.ny.gov/.
David Roberts, "A closer look at Washington's superb new 100% clean electricity bill," Vox, last modified April 18, 2019, accessed May 25, 2019, https://www.vox.com/energy-and-environment/2019/4/18/18363292/washington-clean-energy-bill.
Steve Cohen, "The Politics of a Green New Deal," Earth Institute, accessed May 13, 2019, https://blogs.ei.columbia.edu/2019/01/14/politics-green-new-deal/.
Cohen, "The Politics," Earth Institute.
IPCC, "Mitigation Pathways," IPCC Special Report.

Figures:

Getty, Brown Coal Power Plant Emission, photograph, Motherjones, January 21, 2019, accessed May 24, 2019, https://www.motherjones.com/environment/2019/01/for-20-years-us-carbon-emissions-have-been-dropping-last-year-they-spiked/.
Jim Richardson, Wind farm in the Flint Hills Aerial view of the Elk River Wind Project near the small town of Beaumont, in the southern Flint Hills region of Kansas, photograph, The Nature Conservancy, 2016, accessed May 24, 2019, https://www.nature.org/en-us/about-us/where-we-work/priority-landscapes/central-great-plains-grasslands/wind-energy-and-wildlife/.
Green Car Reports, PowerPost Level 1 electric-car charging stations at Portland International Airport, photograph, Alabama Today, accessed May 24, 2019, https://www2.greencarreports.com/news/1099635_portland-airport-adds-42-electric-car-chargers-at-120-volts-heres-why.
AFP, Christine Lagarde, photograph, The Independent, January 23, 2014, accessed May 24, 2019, https://www.independent.co.uk/news/world/europe/imf-chief-christine-lagarde-is-investigated-over-compensation-paid-to-tycoon-8466024.html.
IMF, The Official Logo of the International Monetary Fund, photograph, Wikipedia, May 27, 2018, accessed May 24, 2019, https://en.wikipedia.org/wiki/File:International_Monetary_Fund_logo.svg.
World Bank, Logo of the World Bank, photograph, Wikimedia Commons, April 9, 2014, accessed May 24, 2019, https://commons.wikimedia.org/wiki/File:Logo_The_World_Bank.svg.
IMF Staff Calculations, Emissions Impact of Carbon Pricing Scenarios, photograph, IMF Blog, May 3, 2019, accessed May 13, 2019, https://blogs.imf.org/wp-content/uploads/2019/05/eng-april-29-climate.png.
Benoit Tessier, Masked protesters wearing yellow vests, a symbol of a French drivers' protest against higher fuel prices, take part in a demonstration on the Champs-Elysees in Paris, France, photograph, November 28, 2018, accessed May 25, 2019, https://www.france24.com/en/20181128-france-pm-philippe-yellow-vest-protesters-paris-macron.
Pablo Delcan, The Problem With Putting a Price on the End of the World, photograph, The New York Times Magazine: The Climate Issue, April 9, 2019, accessed May 26, 2019, https://www.nytimes.com/interactive/2019/04/09/magazine/climate-change-politics-economics.html.
Rich Pedroncelli, State Sen. Kevin de León (D-Los Angeles) holds up his environmental measure Senate Bill 100 after it was signed into law by Gov. Jerry Brown on Monday in Sacramento., photograph, LA Times, September 10, 2018, accessed May 26, 2019, https://www.latimes.com/politics/la-pol-ca-renewable-energy-law-signed-20180910-story.html.
Kevin Coughlin, Governor Andrew M. Cuomo announces in August that Exelon Generation has agreed to assume ownership and management of the James A. FitzPatrick nuclear power plant in Scriba., photograph, WSHU Public Radio, June 1, 2017, accessed May 26, 2019, https://www.wshu.org/post/new-yorks-plan-combat-climate-change-still-track#stream/0.
Bettina Hansen, Gov. Jay Inslee puts on a hat emblazoned with "100%" before signing Senate Bill 5116 into law on Tuesday at the Rainier Vista development in Seattle. The bill is one of five Inslee signed on Tuesday aimed at addressing climate change., photograph, Seattle Times, May 8, 2019, accessed May 26, 2019, https://www.seattletimes.com/seattle-news/politics/inslee-signs-package-of-long-sought-climate-bills-that-include-a-phase-out-of-coal-and-natural-gas-fired-power-plants/.

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