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Interactions between State and Federal Climate Change Policies

In: The Design and Implementation of U.S. Climate Policy

  • Lawrence H. Goulder
  • Robert N. Stavins

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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This chapter was published in:
  • Don Fullerton & Catherine Wolfram, 2012. "The Design and Implementation of U.S. Climate Policy," NBER Books, National Bureau of Economic Research, Inc, number full10-1, October.
  • This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 12124.
    Handle: RePEc:nbr:nberch:12124
    Contact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
    Phone: 617-868-3900
    Web page: http://www.nber.org
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    1. 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 qt0177r7xp, Institute of Transportation Studies, UC Davis.
    2. 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.
    3. Ostrom, Elinor, 2009. "A polycentric approach for coping with climate change," Policy Research Working Paper Series 5095, The World Bank.
    4. 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.
    5. 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.
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