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Addressing the Risks of Climate Change: The Politics of the Policy Options

Addressing the Risks of Climate Change: The Politics of the Policy Options

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Published by Climate Task Force
Just days after the House passed its first ever comprehensive climate legislation aimed at curbing greenhouse gas emissions, former domestic policy advisor to Vice President Al Gore and U.S. Climate Task Force (CTF) co-founder Dr. Elaine C. Kamarck released a new paper that takes a close look at the full range of climate policies currently being debated.

Dr. Kamarck’s paper explores some of the politics and pitfalls surrounding climate change policy, specifically carbon tax and cap-and-trade solutions. A carbon tax would directly tax the carbon content of fuels. A cap-and-trade system would set an overall cap for emissions and allow trading of emission permits between companies that more than meet their caps with those that don’t. The analysis is intended to help decision makers and the public better understand some of the pros and cons associated with these particular climate policies.

Any meaningful solution to climate change will substantially increase the cost of traditional sources of energy, and thus a nation’s overall energy bill. These costs are not insignificant and should be weighed carefully when considering which policy to pursue so as to mitigate the effects on economic activity, personal income and employment while also addressing climate change.

The most important conclusion of the paper is that the conventional wisdom about the politics of a cap-and-trade system need to be re-examined and the idea of a carbon tax resurrected.

Visit www.climatetaskforce.org for more information!
Just days after the House passed its first ever comprehensive climate legislation aimed at curbing greenhouse gas emissions, former domestic policy advisor to Vice President Al Gore and U.S. Climate Task Force (CTF) co-founder Dr. Elaine C. Kamarck released a new paper that takes a close look at the full range of climate policies currently being debated.

Dr. Kamarck’s paper explores some of the politics and pitfalls surrounding climate change policy, specifically carbon tax and cap-and-trade solutions. A carbon tax would directly tax the carbon content of fuels. A cap-and-trade system would set an overall cap for emissions and allow trading of emission permits between companies that more than meet their caps with those that don’t. The analysis is intended to help decision makers and the public better understand some of the pros and cons associated with these particular climate policies.

Any meaningful solution to climate change will substantially increase the cost of traditional sources of energy, and thus a nation’s overall energy bill. These costs are not insignificant and should be weighed carefully when considering which policy to pursue so as to mitigate the effects on economic activity, personal income and employment while also addressing climate change.

The most important conclusion of the paper is that the conventional wisdom about the politics of a cap-and-trade system need to be re-examined and the idea of a carbon tax resurrected.

Visit www.climatetaskforce.org for more information!

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Published by: Climate Task Force on Jun 30, 2009
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The U.S. Climate Task Force
Addressing Climate Change:
The Politics of thePolicy Options
by Elaine Kamarck, PhD
Harvard KennedySchool of Government
 June 2009
 
Table of Contents
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3Some Recent History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3The Original Option — A Carbon “Tax-Shift” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6Reexamining the Conventional Political Wisdom: The BTU Tax and SO2Emissions Trading . . . . . . . . . . . . .7Lieberman-Warner Tests the Cap and Trade Consensus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10The Politics of Climate Change — What Have We Learned So Far? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12Complexity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13Fairness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15International Compatibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19The Way Forward . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20 About the Author . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
Elaine Kamarck, PhD
Harvard Kennedy School of Government
For the U.S. Climate Task Force
(The views expressed in this paper are the Author’s only.)
 
It has been 30 years since scientists introduced the problemof global warming into the American political dialogue.More than a generation later, the news from the polar icecaps grows worse with each passing year.Environmentaldisruptions, extreme weather events, species extinction andnew and more powerful germs are frequent topics in thenews; and as a result, public awareness and concerns haveincreased. Although scientists cannot predict exactly whena “tipping point” will occur and the changes in our atmos-phere from greenhouse gases will become irreversible,ascientific consensus has formed that we must begin to actnow if we are to avoid profoundly damaging changes inweather patterns and sea levels that would disrupt countlessecosystems, threaten many low-lying parts of the world, andprofoundly affect weather patterns. In short, solving theclimate change crisis cannot take another 30 years.But there are daunting political problems to be dealt within solving the climate challenge — and in the past year,theeconomic crisis facing the United States and the world hasmade some of those problems even more intractable. Thispaper looks at the politics of the climate change crisis,inthe hope that a better understanding of these dynamics willenable policymakers to avoid some of the political pitfallsand act both quickly and responsibly.
Some Recent History
While the climate change problem has been with us for sev-eral decades, the possible solutions have recently come tothe forefront of the political debate. Climate change was ini-tially raised in Congress in the late 1970s,when thenCongressman Al Gore held the first hearings on globalwarming and its effects on the climate. Then, with theexception of a number of administrative initiatives, theissue languished for much of the next two decades. ALexisNexis search of major U.S. newspapers in the last three years of the 1970s yielded just over 100 articles onclimate change. (The same search covering the last three years produced more than 1,000 hits.) The first front-pageNew York Times story on climate change appeared in 1981.While there was sparse polling on climate change in the1970s and 1980s, a 1981 poll found that less than half of thepublic had heard of the greenhouse effect and of those, only 37percent thought it was “somewhat serious.
1
The discov-ery of the ozone hole in the atmosphere by British scientistsin 1985 and subsequent international action in Montrealhelped to establish for many people the concept that humanactivity is, in fact, an influence on climactic conditions, animportant step forward. A few years later, the climate expertJames Hansen’s testimony before Congress during anextremely hot spell in Washington was widely covered andthrust the issue into newspapers around the country.Even so, climate change continued to encounter problemspenetrating the American political agenda. Unlike priorenvironmental concerns and the popular movements they inspired, cause and effect in climate change are not imme-diately observable. In earlier instances of environmental
 A LexisNexis search of major U.S. newspapersin the last three years of the 1970s yields justover 100 articles on climate change.
1 Opinion Research Corporation poll, May 1981, USORC.81MAY.R22. 5% Not at all serious, 16% Not too serious, 28% Somewhat serious, 37% Very serious, 24%Don’t know: Opinion Research Corporation poll, April 1980, USORC.80APR1.R3M. Data furnished by Roper Center for Public Opinion Research, Storrs, CT.
 Addressing Climate Change: The Politics of the Policy Options
Introduction
It often takes a long time for a policy issue to get to the point where all the complex factors required for change throughthe American political process come together. Take health care. President Harry Truman advocated universal health carefor all Americans in the late 1940s, universal health care was provided for senior citizens and the poor in 1965,and now  we are well into the 21st century and still arguing about whether and how to guarantee health care coverage for allAmericans.
 Addressing Climate Change • 3

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