By Robert L. Glicksman[*]

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As 2007 drew to a close, climate change dominated the environmental law and policy agenda.  A perfect storm of events has focused attention both in the media and on Capitol Hill, to an unprecedented degree, on the need to address climate change.[1]  These events include a series of reports on climate change issued by the Intergovernmental Panel on Climate Change (IPCC) throughout 2007, the award of the Nobel Peace Prize to former Vice President Al Gore and the IPCC, the devastation wrought by Hurricane Katrina and discussion among scientists about whether climate change tends to increase hurricane intensity, the wildfires in southern California, a series of international climate change conferences culminating in a year-end conference under the United Nations Framework Convention of Climate Change[2] in Bali, identification of links between climate change and national security,[3] and the steady stream of scientific reports documenting the degree to which climate change has already begun to alter the planetary environment in ways that often exceed previous predictions.[4]  Late in 2007, a long-time congressional supporter of tougher fuel efficiency standards for automobiles, when discussing an energy bill to address aspects of climate change, stated:  “Things are now dramatically and in a telescoped time frame all coming together to address these issues that have been on a 30-year detour.â€�[5]

Professor Victor Flatt’s essay Taking the Legislative Temperature[6] distills the policy issues reflected in the various bills on climate change pending near the end of the first session of the 110th Congress.  The issues he covers deal primarily with defining the substantive goals of climate change legislation and selecting appropriate policy instruments to achieve them.  This Essay focuses more on the institutional design of a climate change regime than on the kinds of substantive choices dealt with by Professor Flatt.  Professor Flatt proceeds on the premise that Congress almost certainly will adopt legislation to address climate change soon, although the form of that legislation is uncertain.  This Essay, which responds to his, also operates on the assumption that Congress will act.  It deals largely with the question of who gets to define the goals of climate change legislation and select the means of achieving them.  These institutional design questions involve determining how much discretion Congress should provide to those responsible for implementing climate change policy and determining who gets to exercise it.  The issues are familiar because discretion “lies at the root of administrative law doctrines and controversies.â€�[7]

By Carol M. Rose[*]

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Victor Flatt’s “Legislative Temperatureâ€� on climate change provides a useful typology of the proposals now under consideration in the U.S. Congress.[1]  Professor Flatt ultimately leaves it to us to decide which proposal is “best.â€�  But by tacit consensus, our legislators have already decided one element of the “bestâ€� legislation:  it will include some version of market-based regulation (“MBRâ€�), in the form of cap-and-trade programs or even (gasp!) taxes.[2]  As Professor Flatt suggests, this development could hardly have been predicted from previous pollution control legislation, which generally adopted various kinds of command-and-control regulation.[3]

What happened?  Professor Flatt attributes the congressional change of heart to the apparent success of the one notable exception to command-and-control regulation; that was the effort to reduce acid rain through a cap-and-trade regime for sulfur dioxide (SO₂) emissions under the Clean Air Act Amendments of 1990.[4]  But Congress instituted the acid rain MBR only after a long and increasingly expensive slog through command-and-control regulation. Indeed, cap-and-trade was to act as a kind of relief from the growing costs of pollution abatement through command-and-control methods.[5]  This is a typical progression of legislative form; in other areas as well, like controlling overfishing, resource economists have noted that sophisticated MBRs only arrive after more cumbersome regulatory regimes have shown their limitations.[6]

By Victor B. Flatt[*]

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[Editor's Note:  We are pleased to present Part II of Professor Flatt's piece on climate change legislative proposals (Part I was posted here).  To read the piece as a whole, you may download the pdf or view the persistent html version.]

II.  What is the best method of reaching our goal?

The next question that must be addressed is how to best reach the goal that we have set.  Professor Rose discussed four broad methods to implement policy goals in environmental legislation, which she colloquially refers to as “do-nothing,â€� “keepout,â€� “rightway,â€� and “property.â€�[52]  “Rightwayâ€� has sometimes been characterized as command and control and “propertyâ€� may also be identified as market mechanisms; moreover, other thinkers and writers may further divide and clarify policy implementation devices, such as feasibility or education.[53]  The pluses and minuses of each of these methods have been explored and debated, and sometimes they are linked to what the ultimate goal of the regulation should be.[54]

By Victor B. Flatt[*]

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[Editor's Note:  This week, we are pleased to present Part I of Professor Flatt's paper on climate change legislation.  Part II of this paper and a number of responses will be appearing in the forthcoming weeks.  We would also like to thank Environment and Energy Daily for allowing us to provide copies of their articles, which are cited in several footnotes.]

INTRODUCTION

The United States will almost certainly enact federal legislation designed to reduce emissions of greenhouse gases within the next two years.  It is uncertain what final form this legislation will take and what variables will be in play in the discussion.  At this stage, even the ultimate target in greenhouse gas reductions is not yet known.  The legislation could have economy-wide effects, or could only affect certain industries.  It might allow the use of offsets or not. It may integrate with existing pollution-control regimes or stand on its own.  It will likely create new wealth for certain segments of the economy, but may put others out of business.  How these and other policy choices are resolved could turn out to be the most important legislative question that our country addresses in the foreseeable future.[1]

As of October 17, 2007, there were at least ten legislative proposals in Congress that address climate change.[2]  As identified by their primary sponsors, these include Bingaman-Specter, Udall-Petri, Lieberman-McCain, Kerry-Snowe, Waxman, Sanders-Boxer, Feinstein-Carper, Alexander-Lieberman, Stark, and Larson.  In addition, other politicians, such as John Dingell, have announced “plansâ€� for legislation, announced their own goals for climate change, and/or endorsed various components of the filed bills.[3]  Although there has been politicking on both sides of this issue, we have not yet defined a suitable framework for evaluating the legislation.  In the case of climate change, it is particularly difficult to come up with a workable framework because of the scope and unusual complexity of the issue.  In fact, because of its connection to so many different parts of the economy, the impact of climate change regulation is present in issues not necessarily characterized as climate change, such as automobile efficiency and other energy legislation.  Nevertheless, the more comprehensively we address climate change, the better.[4]

It may seem difficult to propose a framework to judge the effectiveness of climate change proposals when there is no agreement on the standards with which we judge legislation generally.[5]  Our legislative process is not transparent, which increases the likelihood of rent seeking[6] and renders it difficult to hold the normative discussions necessary to inform the public so that it can demand the particular kinds of consideration it desires.  Political power-games add another dimension that makes the discussion even more complex.[7]

I will not attempt to devise a comprehensive framework with which to analyze the desirability of all legislation.  But with respect to climate change, there are certain policy choices that must be debated.  An analysis of these policy choices and their importance creates a common framework for discussion.  We may not all agree that rising temperatures in Alaska are bad, but knowing the outcome of a particular policy choice provides a basis for understanding the popular will and opinion regarding the choice.[8]  Therefore, this Colloquy Essay specifies:  1) the most important policy choices at stake in climate change legislation, 2) why they are important, 3) the best resolution of these issues, and 4) how the current legislative proposals deal with them.

Legislation is a dynamic and iterative process.  The legislative proposals analyzed in this Essay may be dropped or changed and other legislation may be proposed before comprehensive climate change legislation is passed.[9]  Indeed, this Essay and the comments that follow will hopefully provide impetus for changing legislative proposals in response to a consideration of issues herein.  Nevertheless, the scientific underpinnings of climate change, including the range of remaining uncertainties, are well enough understood that the analytical principles associated with climate change issues will not change in the immediate future.  Therefore, the analysis of the policy choices herein should inform any forthcoming climate change legislation and also serve as a resource for examining inevitable shortcomings and possible amendments in climate change legislation of the future.

This analysis is divided into two parts.  The first part will analyze the goals or purposes of climate change legislation, and the second part will look at the policy choices associated with reaching these goals.[10]  The method of accomplishing these goals would be considered “bestâ€� if it reaches and accomplishes all of the goals in the most efficient way possible.[11]