This document summarizes a report by the World Resources Institute on U.S. greenhouse gas emissions and policies to reduce them. The report finds that without new federal action, U.S. emissions will increase and the country will fail to meet its commitment to reduce emissions 17% by 2020. It recommends that the EPA pursue substantial reductions from power plants and natural gas using Clean Air Act authority. States should also complement federal policies. However, new federal legislation will likely be needed to achieve long-term reductions of over 80%. The document discusses debates around different policy approaches and criteria for effective policies.

1. In Search of Effective and Viable Policies to
Reduce GHG Emissions
Article by
Nicolas Burger, Liisa Ecola, Thomas Light & Michael Toman
Environmental Pollution Policy: A US Approach
Lead Discussion
Jenkins Macedo, MA
February 14, 2013

2. SOME STATISTICS AND BACKGROUND INFORMATION

3. What did he say?

4. Are we on track to fulfill
our commitment in
reducing GHG emissions by
17% to 2005 levels by
2020?

5. U.S. GHG Emissions Mitigation Target
Source: WRI 2013

7. KEY FINDINGS FROM THE WRI 2013 REPORT
v “Without new action by the U.S. Administration, greenhouse gas (GHG) emissions will increase
over time. The United States will fail to make the deep emissions reductions needed in coming
decades, and will not meet its international commitment to reduce GHG emissions by 17 percent
below 2005 levels by 2020.”
v “The U.S. EPA should immediately pursue “go-getter” emissions reductions from power plants
and natural gas systems using its authority under the Clean Air Act. These two sectors represent
two of the top opportunities for substantial GHG reductions between now and 2035.”
v “The U.S. Administration should pursue hydrofluorocarbon (HFC) reductions through both the
Montreal Protocol process and under its independent Clean Air Act authority. Eliminating HFCs
represents the biggest opportunity for GHG emissions reductions behind power plants.”
v “U.S. states should complement federal actions to reduce emissions through state energy
efficiency, renewables, transportation, and other actions. States can augment federal reductions.”
v “New federal legislation will eventually be needed, because even go-getter action by federal and
state governments will probably fail to achieve the more than 80 percent GHG emissions
reductions necessary to fend off the most deleterious impacts of climate change.”
Source: WRI, 2013

8. World Resources Institute’s Recommended
Approaches to GHG Mitigation
v “Lackluster” scenario that
aggregates reductions at the lower
end of what is technically feasible,
therefore representing “low
regulatory ambition.”
v a “Middle of the Road” scenario
that combines reductions “generally
in the middle of the range
considered technically feasible and
corresponding to moderate
regulatory ambitions.”
v a “Go-Getter” scenario that
combines higher-feasibility
reductions with “higher regulatory
ambition.”

9. Global Carbon Cycle (Billion Metric Tons Carbon)

10. U.S. Anthropogenic Greenhouse Gas Emissions by Gas, 2001
(Million Metric Tons of Carbon Equivalent)

11. U.S. Primary Energy Consumption and Carbon
Dioxide Emissions, 2001

12. Trends in Atmospheric Concentrations and
Anthropogenic Emissions of Carbon Dioxide

13. Carbon Intensity by Region, 2001-2025
(Metric Tons of Carbon Equivalent per Million $1997)

14. OBJECTIVE OF THE PAPER
To develop effective and viable pollution policies
that would harness economic incentives while
reducing greenhouse gas emissions.

15. WHY REGULATE
GREENHOUSE GAS
EMISSIONS?

16. POLICIES LESSONS FROM THE PAST
v Clinton’s Administration Partnership for New Generation of
Vehicles
o private-public partnership focused on technology improvements
v Clinton’s British Thermal Unit Energy Tax
o It includes tax rates based on the carbon content of the fuel.
v Corporate Average Fuel Economy (CAFÉ) standards
o It requires automobiles manufacturers to meet minimum fuel
efficiency standards (cars and light trucks).

17. The Obama Administration
v American Clean Energy and Security Act (2009)
o Cut CO2 emissions by 17% to 2005 levels by 2020
v American Power Act (failed to pass 60% Congress)
v 2010 Obama Administration proposed the Carbon Pollution
Standard for new power plants only half the emission compared to
uncontrolled plant.
o Pollution limits on existing plants needs to also be considered.
v National Renewable Electricity Program (2011)
o Requires Utility companies to generate 80% of their electricity from no-
or low-carbon pollution sources by 2035.

18. GHG Mitigation Policies: “Should Anticipate the Unexpected.”
v Coverage changes
v Changes in approaches
v Stringency of GHG controls (Why are these aspects important?)
v Incentives for innovation

19. RESTRUCTURING GHG MITIGATION POLICIES
v Obama Administration GHG Cap and Trade Program
o GHG Emissions limitation
o Allowances to quantify emissions
o Less emitter can trade their allowance to others
o Market systems that promote economic development

20. Downstream Vs. Upstream Approach to Cap and Trade
v Measures and restricts actual emissions (DS)
v Emitters have sufficient allowances to match their emissions (DS).
v Linked to the production of fossil fuels rather than emissions itself (US).
v Allowances are based on the Carbon content of fuel and its implied
emissions per unit of fuel use (US).
v Congressional proposals (a combination of these approaches)

21. Other Regulatory Approaches to Reduce CO2 Emissions
v Carbon Tax
o Taxing fossil fuels based on their Carbon content and the associated
amount of CO2 that is emitted per unit of fuel used.
o Expended to include the other GHGs potential to global warming relative to
CO2 emissions.
v Hybrid system of cap-and-trade
o allocates free allowances to large fossil energy users (industrial and power
plants).
v Tighter Fuel-economy and other energy-efficiency standards
o buildings, appliances, and other end users.

22. ANALYTICAL FRAMEWORKS

23. RESTRUCTURING POLLUTION POLICIES:
“The Normative Criteria.”
Cost-
effectiveness
GHG
Adaptability
to Change Emissions Fairness
Mitigation
Incentives
for
Innovation

24. Cost-effectiveness (Utilitarianism)
v Achievement of goals at least cost society (i.e., the
cap-and-trade approach)-cost-benefit analysis.
o The extent and means of mitigating pollution is
individualized to sources, which tend to make viable
economic choices.
o Involves broad, consistent coverage of emissions sources,
a relatively low cost of implementing regulation, and
reasonable predictable rules and procedure to reduce
uncertainties associated with operation.

25. Fairness (Environmental Justice)
v GHG mitigation measures may disproportionately impact
the livelihoods of certain households and Workers.
o Designing policy that reflects a broader spectrum of societal
judgment of “fair burden sharing of compliance cost” for different
groups (i.e., gasoline tax along with lump-sum rebates scale
against households income). Any idea?
o Alleviating economic adjustment cost associated with GHG
mitigation policy through temporary compensations (returning
portion of the revenue generated to workers or communities
whose economies are adversely affected by the reduce of coal use
or high cost of electricity.
o Instituting a system that target the burden of the cost of
compliance to those who produce the most GHG emissions and
obtain the greatest economic benefit by doing so (i.e., designing
allowance allocation in the cap-and-trade).

26. Incentives for innovation (Sustainable Development)
v Necessary to expand affordable long-term GHG mitigation option.
v Economic rewards for technological innovation that reduce GHG
emissions.
v Incentives-based policies such as cap-and-trade, carbon-based fossil fuel
tax, help drive demand for lower-emissions technologies that will adversely
reduce the cost of compliance.
v The government can finance and carry out research and development (i.e.
include research laboratories).

27. Adaptability to change overtime (Flexibility of the Policy)
v Policy framework that can be changed over time to meet
the attitudinal, behavioral and institutional change
toward GHG emissions.

28. DISCUSSION QUESTIONS

29. Q1. The development of GHG mitigation policies
requires identifying and quantifying pollutants that need
to be reduced. Should the cap-and-trade system or carbon
tax only include stationary sources and exclude mobile
sources? Or can the two merge in regulatory approaches in
regulating GHG emissions?

30. Q2. How do we distribute the direct and
indirect costs of regulating GHG mitigation
among those being regulated and across various
parts of the larger economy?

31. Q3. Why is it relevant when formulating GHG
mitigation measures or regulations to rethink the
adverse impacts on the livelihoods and workers in
some communities?

32. Q4. Which analytical framework (discussed by Salzman
& Thompson, Jr.) would you ascribed to the authors’
approach in framing environmental pollution policy?

33. Q5. In what ways can incentives for innovation have a negative or
positive cost-effectiveness?

34. SOURCES
U.S. Energy Information Administration (2004). GHG. URL: http://www.eia.gov/oiaf/1605/ggccebro/chapter1.html. Accessed:
02/10/2013.
World Resources Institute (WRI 2013). “Can the U.S. Get There from Here? Using Existing Federal Laws and State Action to Reduce
Greenhouse Gas Emissions.” URL: http://www.wri.org/publication/can-us-get-there-from-here. Accessed: 02/12/2013.
Lisa Friedman (2013). “U.S. May Not Meet Greenhouse Gas Emissions Pledge without More Action.” URL: http://
www.scientificamerican.com/article.cfm?id=us-may-not-meet-greenhouse-gas-emissions-pledge-without-more-action. Accessed:
02/08/2013
International Food Policy Research Institute (2012). “Carbon Dioxide Emissions in Developed and Developing Countries.” URL:
http://www.ifpri.org/sites/default/files/bk_2012_gfpr_ch04_fig01.png. Accessed: 02/08/2013
U.S. Environmental Protection Agency (2012). URL:
http://www.epa.gov/climatechange/science/indicators/ghg/global-ghg-emissions.html. Accessed: 02/07/2013
World Resources Institute (2008). “US GHG Emissions Flow Chart.” URL:
http://www.wri.org/chart/us-greenhouse-gas-emissions-flow-chart. Accessed: 02/09/2013.
Institute for Energy Research (2012). “U.S. Energy-Related Carbon Dioxide Emissions Declining.” URL:
http://www.instituteforenergyresearch.org/2012/07/20/u-s-energy-related-carbon-dioxide-emissions-are-declining/. Accessed:
02/08/2013.
Todd Stern (2012). “Special Envoy to the Climate Change Meeting in Durbai, UAE.” URL:
http://unfccc.int/resource/docs/cop18_cmp8_hl_statements/Statement%20by%20USA.pdf