By adopting an ambitious mandatory energy saving target for 2030 the State of California is well on its way to addressing the pressing issue of Climate Change. Global climate change affects the American public with growing visibility and ferocity. As severe weather events wreak havoc on the East coast or wildfires consume hundreds of thousands of acres here in the West, concern about the effects of climate change grows. In addition, the American public bears a heavy financial burden as tax dollars fund increased firefighting efforts; provide disaster relief to flooded cities and towns; and subsidize the climate issues affecting the American bread basket. However, despite the growing cost to cope with the effects of climate change, national policy to address climate change is still a long way off.
Cap-and-Trade in the US
The Regional Greenhouse Gas Initiative (RGGI) is the first mandatory CO2 reduction cap-and-trade program in the US. Under RGGI Northeastern and Mid Atlantic states have capped the CO2 emissions in the power sector with the goal of reducing power sector CO2 emissions 10 percent from the 2002-2004 average by 2018.
California began its own cap-and-trade program as well, with several major industrial sectors joining power as capped entities. Many other states – and hopefully the federal government- are watching intently to see how the California program plays out, as California prides itself on its trailblazing adoption of many environmental policies.
Federal cap-and-trade programs are not new in the U.S., with many people being familiar with the 1990 Clean Air Act Acid Rain Program’s SO2 trading system. This cap-and-trade system is widely considered a major success,with an Office of Management and Budget study finding benefits exceeding costsby a 40:1 ratio
Policy on Climate Change
Americans, witnessing a relentless onslaught of wildfires, droughts and recent flooding are fearful of losing their freedoms and way of life. As severe weather is becoming the new normal across the U.S., the price of inaction is becoming ever clearer. The specific cost and benefits of the cap-and-trade programs are yet to be determined, and a public that traditionally looks so favorably on market-based solutions and “quick wins” remains unconvinced on the potential of a market-based cap and trade solution.
Climate change could fundamentally change how we as Americans interact with each other, the rest of the world, and our environment. As the U.S. struggles with national policy on climate change, we fall behind other countries on this important global issue. In his victory speech on election night, President Obama gave brief but equal mention to ending the dependence of the US on foreign oil and tackling climate change. Perhaps by addressing climate change in terms of energy security federal action stands a chance. Perhaps, under the emerging “new energy economy” America can reclaim its position of leadership in the world.
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