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Challenges from State-Federal Interactions in US Climate Change Policy

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  • Lawrence H. Goulder
  • Robert N. Stavins

Abstract

With a focus on two sorts of regulation--renewable electricity and clean energy standards, and automobile fuel-economy standards--we analyze problematic interactions that arise when state policies are nested within the domain of Federal policy. Here state efforts may fail to reduce greenhouse gas emissions nationally, and may compromise cost-effectiveness. Difficulties from overlapping regulations are avoidable through price- (as opposed to quantity-) based Federal policy. We identify some potentially positive interactions between state and Federal policies, and identify rationales for state action when Federal and state policies do not overlap.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/aer.101.3.253
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Review.

Volume (Year): 101 (2011)
Issue (Month): 3 (May)
Pages: 253-57

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Handle: RePEc:aea:aecrev:v:101:y:2011:i:3:p:253-57

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  1. Fischer, Carolyn & Preonas, Louis, 2010. "Combining Policies for Renewable Energy: Is the Whole Less than the Sum of Its Parts?," Discussion Papers dp-10-19, Resources For the Future.
  2. Goulder, Lawrence H. & Jacobsen, Mark R. & van Benthem, Arthur A., 2012. "Unintended consequences from nested state and federal regulations: The case of the Pavley greenhouse-gas-per-mile limits," Journal of Environmental Economics and Management, Elsevier, vol. 63(2), pages 187-207.
  3. Holland, Stephen P. & Knittel, Christopher R & Hughes, Jonathan E., 2008. "Greenhouse Gas Reductions under Low Carbon Fuel Standards?," Institute of Transportation Studies, Working Paper Series qt9gh5b4rv, Institute of Transportation Studies, UC Davis.
  4. Dallas Burtraw & William Shobe, 2008. "State and Local Climate Policy under a National Emissions Floor," Working Papers 2008-05, Center for Economic and Policy Studies.
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Cited by:
  1. William Shobe & Dallas Burtraw, 2012. "Rethinking Environmental Federalism in a Warming World," Working Papers 2012-01, Center for Economic and Policy Studies.
  2. Burtraw, Dallas & Woerman, Matt, 2013. "Economic ideas for a complex climate policy regime," Energy Economics, Elsevier, vol. 40(S1), pages S24-S31.

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