Policy Options on Climate Change
Today's topic in Bloomberg is climate change. The economic case for a revenue-neutral carbon tax is as strong as the political case for it is weak. We ought to consider other incremental policies to address climate change which, though suboptimal, are politically practical. Read here:
The political death of climate-change policy could have come in 2009, when the Waxman-Markey cap-and-trade emissions bill failed in the U.S. Senate. But it didn't.
In fact, President Barack Obama's first term has brought substantial progress on climate change. Two of the biggest successes were fuel-economy standards and emissions limits on new power plants. For passenger cars and light trucks, corporate average fuel economy will rise from 29 miles per gallon in this year to 35.5 mpg in 2016 and 54.5 mpg in 2025. In 2014, fuel-economy standards will cover medium-duty and heavy trucks for the first time. For power plants, the Obama administration has established limits on emissions of mercury and particulate matter and is working on new caps for carbon dioxide.
As the president looks toward his second term, he has pledged that climate change will be one of his top three priorities. Given that a carbon tax or cap-and-trade program still seem to be remote possibilities, what else can be done? Here are four plausible policy options.