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Interactions Between State and Federal Climate Change Policies

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  • Lawrence Goulder

    ()
    (Stanford Environmental and Energy Policy Analysis Center)

  • Robert Stavins

    (Kennedy School of Government, Harvard University
    National Bureau of Economic Research)

Abstract

Federal action addressing climate change is likely to emerge either through new legislation or via the U.S. EPA’s authority under the Clean Air Act. The prospect of federal action raises important questions regarding the interconnections between federal efforts and state-level climate policy developments. In the presence of federal policies, to what extent will state efforts be cost-effective? How does the co-existence of state- and federal-level policies affect the ability of state efforts to achieve emissions reductions? This paper addresses these questions. We find that state-level policy in the presence of a federal policy can be beneficial or problematic, depending on the nature of the overlap between the two systems, the relative stringency of the efforts, and the types of policy instruments engaged. We evaluate a number of arguments that have been made to support state-level climate policy in the presence of federal policies, even when problematic interactions arise.

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Bibliographic Info

Paper provided by Stanford Institute for Economic Policy Research in its series Discussion Papers with number 09-027.

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Date of creation: Jun 2010
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Handle: RePEc:sip:dpaper:09-027

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Keywords: Clean Air Act; climate change; EPA; emissions leakage; federalism; cap-and-trade; carbon tax; regualtion;

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References

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  1. Stephen P. Holland & Christopher R. Knittel & Jonathan E. Hughes, 2007. "Greenhouse Gas Reductions under Low Carbon Fuel Standards?," NBER Working Papers 13266, National Bureau of Economic Research, Inc.
  2. Burtraw, Dallas & Parry, Ian & Goulder, Lawrence & Williams III, Roberton, 1998. "The Cost-Effectiveness of Alternative Instruments for Environmental Protection in a Second-Best Setting," Discussion Papers dp-98-22, Resources For the Future.
  3. 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.
  4. Ostrom, Elinor, 2009. "A polycentric approach for coping with climate change," Policy Research Working Paper Series 5095, The World Bank.
  5. 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.
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Cited by:
  1. Arik Levinson, 2011. "Comment on "Interactions between State and Federal Climate Change Policies"," NBER Chapters, in: The Design and Implementation of U.S. Climate Policy, pages 122-125 National Bureau of Economic Research, Inc.
  2. Chan, Gabriel & Stavins, Robert & Stowe, Robert & Sweeney, Richard, 2012. "The SO2 Allowance Trading System and the Clean Air Act Amendments of 1990: Reflections on Twenty Years of Policy Innovation," Working Paper Series rwp12-003, Harvard University, John F. Kennedy School of Government.
  3. ZhongXiang Zhang, 2012. "Competitiveness and Leakage Concerns and Border Carbon Adjustments," CCEP Working Papers 1208, Centre for Climate Economics & Policy, Crawford School of Public Policy, The Australian National University.
  4. Galarraga, Ibon & Abadie, Luis M. & Ansuategi, Alberto, 2013. "Efficiency, effectiveness and implementation feasibility of energy efficiency rebates: The “Renove” plan in Spain," Energy Economics, Elsevier, vol. 40(S1), pages S98-S107.

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