Advancing the Science of Climate Change (2010) / Chapter Skim
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17 Designing, Implementing, and Evaluating Climate Policies
17 Designing, Implementing, and Evaluating Climate Policies
Pages 401-420
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. Understanding how well implemented policies are working, or how proposed policies will work, requires scientific research on both current and possible future climate policies.
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For an actual assessment of current policies being considered in the United States to limit the magnitude of future climate change, see the companion report Limiting the Magnitude of Future Climate Change (NRC, 2010c) ; for a more detailed description of potential policy approaches related to adaptation to climate change, see the companion report Adapting to the Impacts of Climate Change (NRC, 2010a)
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GHG emissions. At the international level, climate policies have been codified in the UNFCCC and the Kyoto Protocol.
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0 TABLE 17.1 National Environmental Policy Instruments and Evaluative Criteria Criteria Environmental Meets distributional Instrument effectiveness Cost-effectiveness considerations Institutional feasibility Depends on level playing Depends on technical Depends on design; Regulations and Emission levels set field; small/new actors capacity; popular with uniform application Standards directly, though subject often leads to higher may be disadvantaged regulators, in countries with to exceptions weak functioning markets overall compliance costs Depends on deferrals and compliance Regressive; can be Often politically unpopular; Taxes and charges Depends on ability to set Better with broad improved with revenue may be difficult to enforce tax at a level that induces application; higher recycling with underdeveloped behavioral change administrative costs institutions where institutions are weak Depends on initial Requires well-functioning Tradable permits Depends on emissions Decreases with limited permit allocation, may markets and complementary cap, participation and participation and fewer pose difficulties for small institutions compliance sectors emitters
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Environmental and cost effectiveness may be enhanced when instruments are strategically combined and adapted to local circumstances. SOURCE: Gupta et al.
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discusses many of these issues in detail. RESEARCH CHALLENGES ASSOCIATED WITH POLICY DESIGN AND IMPLEMENTATION The need for future climate policies that are broader in scope, more flexible, and more ambitious than current policies will also require that policy makers employ iterative decision making and adaptive risk management (see Box 3.1)
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In the United States, the Environmental Protection Agency (EPA) is responsible for the annual national summary report of GHG emissions and sinks, and the Department of Energy's Energy Information Administration provides energy statistics in greater detail.
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Assessing the Costs and Benefits of Climate Targets One of the most critical issues in policy design is comparing and assessing different trajectories to achieve GHG emissions reductions and evaluating the consequences and implications of those trajectories for human and environmental systems. A recent NRC study (NRC, 2010j)
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If costs and benefits can be systematically and reliably projected and compared (discussed below are five of the major challenges that must be met to accomplish this objective) , the socially optimal level of GHG emissions will be the level where the marginal benefit of reducing GHG emissions further will be equal to the marginal cost of making further GHG emissions reductions.
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However, the implicit value this imputes to GHG emissions reductions is still equal to the marginal cost of GHG emission reductions that results from hitting the target or staying within the tolerable window. Of course, this implicit value can then be used to adjust the target if that value is felt to be lower or higher than the aggregated marginal value of the climate change impacts avoided.
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This problem is pervasive in many areas of environmental assessment, and various methods, including contingent valuation and hedonic pricing approaches, have been developed to infer people's valuations for nonmarketed goods from their choices in related markets or suitably disciplined surveys (Arrow et al., 1993; Atkinson and Mourato, 2008; Carson, 1997; Mendelsohn and Olmstead, 2009)
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It is possible that technological innovation will create opportunities to reduce GHG emissions at lower than present costs, but the rate of such innovation and the relative influence and mechanisms of various possible ways to stimulate it are subject to substantial uncertainties. Alternative models of induced technological change highlight the influence of policies to raise the effective price of emissions, learning-by-doing, public versus private investments in research and development structured in various ways, basic science versus specifically targeted research, and overall investment driven by aggregate economic growth.
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Examining Complex and Interacting Policies While many policy analyses, such as benefit-cost, assume rather generic policy instruments (e.g., a single tax on GHG emissions or a single cap-and-trade policy that applies to all fossil fuel consumption in the nation uniformly) , actual policies are much more complex.
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in Annex 2 countries. Besides generating carbon credits, CDMs are also required to produce a "development dividend" by creating jobs, promoting sustainable development, and other methods (the definition of what constitutes sustainable development requirements varies substantially across countries)
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Processes at the global and national levels will influence local adaptation decisions and vice versa; in the United States and around the world, a great variety of actors and institutions including local, regional, state, federal, and tribal authorities will influence those decisions (e.g., Agrawal, 2008; Armitage et al., 2007; Bulkeley, 2005; Cash et al.,
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. Equity issues will also greatly drive political debates in the domestic climate policy context (see Limiting the Magnitude of Future Climate Change [NRC, 2010c]
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This research includes improving methods for quantifying and comparing benefits, costs, and risks associated with climate change and climate policies; developing methods for analyzing complex policies and combinations of policies; learning how to design policies that work at multiple levels of governance; and examining climate policies in a broad context, including overall sustainability goals, concerns with equity, and relationships with an array of nonclimate policies. The challenges are substantial but so are the opportunities for both advancing science and gaining scientific knowledge that contributes to effective policy making.
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Finding appropriate discount rates and identifying appropriate ways to handle equity effects of climate policies are in part public choices, but a program of scientific analysis can both identify better ways to handle these issues in benefit-cost and cost-effectiveness analyses and develop tools for better assessing the appropriate values to use, including valid and reliable methods of eliciting preferences. Better characterization of uncertainty across all aspects of climate change science and better integration of uncertainty into analytical tools are also extremely important for improving policy design.
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. Develop analytical approaches that examine and evaluate climate policy taking into account its full range of effects including those on human well-being and ecosystems integrity, unintended consequences and equity effects.
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. It is also important to consider equity across social groups and time, so that current efforts to limit or adapt to climate change do not have major negative effects on human well-being and ecosystem health in several decades or centuries.
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