Climate Change Policy in the U.S. - Answers from the Subnational Level
By Markus Knigge

Since the Kyoto Protocol came into force, the United States has been effectively on the sidelines in the area of climate change. In fact, policy at the federal level is largely frozen by the current administration's refusal to contemplate any policies that impose mandatory controls on domestic greenhouse gas (GHG) emissions. Interestingly, activities at the state, regional, and local levels indicate considerable potential within the American political framework to develop policies at the subnational level that respond to the challenge of climate change. Perhaps most surprisingly, a variety of policies and measures that have proven controversial at the federal level - such as renewable portfolio standards, GHG emission targets, and the mandatory reporting of GHG emissions - have often been implemented at the state or local level with very little dissent. In fact, until the 2002 legislation that set California on a path to establishing carbon dioxide emissions standards for vehicles, experience in developing climate change initiatives at the subnational level has generally been bipartisan and consensual.

Individual U.S. states, if they were ranked as nations, would represent twelve of the top twenty-five global emitters of carbon dioxide, or thirty-four of the top fifty. Given this state of affairs, actions at the subnational level can clearly make a contribution to the reduction of global GHG emissions. Moreover, not only do states' climate change initiatives serve to reduce actual GHG emissions, they may also serve as examples for other states to follow, thus spreading across the continent and ultimately prompting regulation at the federal level. In fact, history shows that states have long been incubators of policy ideas that ultimately sweep across regions and, in some instances, are later embraced in some form at the federal level. A number of factors indicate that this might also hold true for climate change policies. The increasing uncertainty among producers and consumers about future legislation, for example, puts pressure on the federal government to adopt a single national framework for controlling GHG emissions. Indeed, businesses generally prefer one single efficiency standard, as it allows them to easily market their products nationwide. Also, the increasing deployment of renewable energy sources in some states allows improvements in the sector's cost-competitiveness through learning and the exploitation of economies of scale; it is not unlikely that an associated increase in the number of industry stakeholders will allow more effective lobbying for favorable market conditions at the national level.

Generally, both states and the federal government can lower their learning costs by building their policies on the experiences of existing subnational programs. Yet, a number of constraints on these effects on policy development and diffusion do exist: First, activities at the state level bring about legal questions with regard to the distribution of tasks, responsibilities and rights between federal and state levels. Indeed, certain initiatives at the subnational level might potentially be in conflict with the Constitution or other federal laws and programs. Second, the dire financial situation of most states already hampers the implementation of existing programs, leaving little financial leeway for further action on climate change. Yet another impediment might be the lack of an adequate electricity grid; for example, the realization of wind power's potential may largely depend on the capability to move electricity from its point of generation to the point of consumer demand, yet some of the states with the highest technical generation capacity are also those with very low population density and, consequently, relatively underdeveloped grids. Lastly, a number of states currently lack the acceptance in their constituencies and political leadership for launching climate change policy innovations. While state agency officials from a number of states, such as New Jersey, New Hampshire, Oregon, and Wisconsin regularly assume roles as active environmental policy entrepreneurs, other states, such as Michigan and Colorado, have different preferences and concerns, such as employment, health care or revenue generation. If not forced by federal action, it seems unlikely that these states will embark on stronger initiatives to combat climate change in the near future.

It will be interesting to see what effects the various subnational initiatives have on other states and the federal government, as many of these subnational policies are now moving into more advanced stages of implementation. As any potential future action at the federal level is likely to draw from states' experiences, actors who wish a more active U.S. role in the effort against climate change might therefore consider supporting subnational initiatives. An international exchange program on policy expertise to curb GHG emissions, technical assistance to encourage the demonstration of cost-effective, clean-energy technologies, and the sharing of risks and learning associated with technology development could prove highly beneficial for state initiatives and thus ultimately also for the federal government. In the end, the U.S. government is expected to devise a serious response to the challenges of climate change, as global efforts are difficult to inspire when the leader on most international matters is far back in the pack. Perhaps the leader itself must be inspired by efforts in its own backyard before any meaningful change can occur?


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Markus Knigge is Senior Fellow with Ecologic and was a DAAD/AICGS Fellow at AICGS in September-October 2005. This essay is the result of his fellowship stay at AICGS.
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This essay appeared in the November 17, 2005 AICGS Advisor. .......................................................................................................................
Want to know more? Check out these links:

Ecologic, Mr. Knigge's home organization.

The Kyoto Protocal

Subnational Environmental Cooperation, by Markus Knigge