From  The Economist - June 29 - 20129

States' rights

America is not such a laggard on climate change as it seems

Is American inaction on climate change going to render bits of the planet uninhabitable by 2100? Or will American grit and ingenuity lower the risks? There is evidance for both views. While the White House was issuing an edict seeking to offer relief to coal-fired power stations last week, New York's state legislature was passing a bill that called on the state to eliminate carbon emissions by 2050. America's political divide often creates split-screen moments. For the 7-3bn people who live beyond the country's borders, this one matters more than most.

America is often denounced as a laggard on climate change. The reality is less bad than that suggests. More than half of all Americans now live in states that have championed legislation to reduce greenhouse-gas emissions. In the past year California, Colorado, Maine, New Jersey, New Mexico and Washington have all joined the club of states with policies to decarbonize electricity generation. Oregon and New York look set to join them.

Those who think global warming is not man-made are, inevitably, opposed to states setting long-range targets to decarbonize the economy. Even some who accept the overwhelming scientific consensus have their doubts. Targets are not the best way to go about reductions, they argue. A carbon price would be better. Market forces are already reducing carbon emissions, as power stations switch to natural gas. There is no point in some states taking action if others do not bother, or if the federal government cannot get its act together, because energy markets do not respect state boundaries. Besides, the targets are too distant: they allow politicians to pose as green while pushing the costs of action onto their successors.

These objections are too gloomy. A carbon price is indeed the optimal way to reduce pollution, but getting people to pay for carbon has been a vote-loser in America and Europe. In a world of second- or third-best options, targets backed by credible plans to reach them are reasonable. Emissions are indeed coming down thanks to the tracking boom, but there is a limit to how far they can fall if natural gas is the primary material from which electricity is generated. Yes, the targets are far into the future, but in New York's case they come with a legal requirement to show progress in the next four years.

Waiting for Washington to take the climate seriously is a counsel of despair. It also ignores the magnitude of states' plans. Pledges by states help set America on the path to a 17% cut in emissions by 2025, using 2005 as a baseline. Add a few more and the total would increase to nearly 25%, putting America within striking distance of the (albeit modest) commitment the previous White House made in Paris in 2016, even though the federal government has promised to withdraw from that agreement.

This matters for two reasons. First, because the world's largest economy is a significant source of pollution. America, like every other country, needs to be on a path to eliminate all emissions by mid-century or shortly thereafter if it is to reduce the risks posed by climate change. Second, because the assumption that America is a laggard gives other countries an excuse to do nothing, undermining international climate diplomacy.

States like California with ambitious laws on emissions can encourage the development of technologies that will then be used by others. And if America can stay on track through state actions, the nationwide politics of climate change might just change in the coming decades. Just over half of Americans aged 55 or over think climate change is man-made and worry about it, according to polling by Gallup. Among Americans aged 18-34, three-quarters do. America's economy has been through transformations before. It can go through another. ■

The great divide


Can states slow global warming without help from the federal government?

Brian Boquist, an Oregon state senator and fugitive of sorts, does not take his pursuers lightly. "Send bachelors and come heavily armed," he warned from his hideout, which is allegedly in Idaho. "I'm not going to be a political prisoner in the state of Oregon," he added. Since June 20th Mr Boquist and the rest of his Republican colleagues in the state Senate have fled from the capitol in Salem as part a final effort to derail a climate-change bill. Kate Brown, the Democratic governor, who is keen to sign the bill, has invoked her constitutional authority to haul the absentee lawmakers back, thus giving Democrats a quorum. Threats from armed militias then forced the closure of the capitol altogether.

When the western stand-off subsides, Oregon may emerge as the latest state to pass ambitious emissions-reductions legislation, in this case a cap-and-trade programme for carbon pollution. New York is poised to approve its own ambitious climate targets—carbon-free electricity by 2040 and a carbon-neutral economy by 2050. A long line of states, including Colorado, Washington and New Mexico, have already enacted clean-energy laws this year. All this as federal environmental policy languishes under an administration that denies climate change is a problem worth tackling and is keen to undo regulations aimed at slowing it down.

More and more states are following California, which began instituting stringent environmental rules decades ago. Rigorous efficiency standards for appliances, businesses and vehicles have brought the Golden State's emissions down. From 2000 to 2016, California's emissions fell by 9% even as its economy and population grew.

Since 2002 renewable-energy standards, which mandate that a steadily increasing percentage of electricity must come from renewable sources, have spurred innovations. And since 2013 the state has had a cap-and-trade programme, which prices carbon by capping maximum emissions. This scheme covers 85% of total greenhouse-gas emissions. The current price of a metric ton of carbon dioxide is $17.45—sizeable, but less than the total cost of carbon pollution, which is estimated to be about $50 per metric ton. So far the specific contribution of the cap-and-trade scheme to emissions reductions is hard to measure, says Dallas Burtraw of Resources for the Future, who chairs the programme's market advisory committee. But it should become more important as the cap tightens and prices rise.

For the newer members of the green-state coalition, policies vary greatly. On the west coast plans are fairly detailed. Jay Inslee, the governor of Washington state, who is running a long-shot bid for president on a climate-centred agenda, signed a bill in May which would make the state's energy supply coal-free by 2025. Washington, which already makes much use of hydroelectric power, plans to accomplish this by reorganizing power generation. The plan goes further, though. The state's energy supplies must be 100% carbon-neutral  by 2030—a year which is not so far away— and 100% carbon-free by 2045.

States like Washington, with Democratic legislatures and" governors, have gravitated more towards renewable targets and clean-energy subsidies than to outright carbon-pricing. Twice during Mr Inslee's six years in office Washingtonians have rejected carbon taxes by referendum. Mr Inslee blames "the oil and gas industry, that had not yet come to terms with this need for transition". Carbon taxes, though much touted by economists, have never been popular with voters.

If not thwarted by fleeing Republican lawmakers, Oregon's plan would take account of that aversion. Its centrepiece is a cap-and-trade programme like California's, which could eventually be integrated into the same regional electricity market. It aims to reduce emissions levels to 45% below 1990 levels by 2035, and to 80% below by 2050. For a small state to implement a cap-and-trade scheme on its own is a tricky proposition. Businesses may find it hard to leave California if energy prices rise, but can more easily spurn smaller places. Administrative costs are higher for a smaller carbon market, as is the chance of major disruptions.

A Big green Apple

New York's approach is different—both because its targets are so ambitious and because the methods for achieving them are unclear. The state was already awash with regulations and programmes to support cleaner power, such as solar and offshore wind farms. The new bill, which Andrew Cuomo, the governor, is expected to sign into law, strengthens them. It includes a binding goal to achieve 70% of electricity generation through renewables by 2030; by 2040 all power would need to be emissions-free. By 2050 the entire New York economy.would need to have emissions 85% below 1990 levels. The remaining 15% would need to be offset, for instance through carbon-capture technology.

Legislators declined to get into the details, bestowing that task on a new "climate action council" that must create recommendations. Kathryn Wylde, the head of the Partnership for New York City, a business group, says she supports efforts to fight climate change but is wary of the looming practical challenge supplying enough energy to New York City when a giant nuclear plant shuts down. Last month the state rejected a new natural-gas pipeline, which opponents had said would undermine New York's climate goals.

State efforts have speeded up in response to the intransigence of the Trump administration. Since Massachusetts V EPA, a Supreme Court ruling issued in 2007, the Environmental Protection Agency (EPA) has been legally required to regulate carbon-dioxide emissions, which the ruling classified as a dangerous pollutant. Under Barack Obama the agency adopted far-reaching regulation known as the Clean Power Plan, which targeted reductions in emissions from electricity generation by phasing out coal. The rule was tied up in the courts and never went into effect.

Last week President Donald Trump finalized its replacement, the strangely named Affordable Clean Energy (ACE) rule. This will not resuscitate the coal industry, as Mr Trump claims. But any future Democratic president would find that undoing it will require another lengthy rule-making process which will take several years. The ace rule might also prove to be a headache for the owners of power stations, in part because of its poor drafting.

The Trump administration is also trying to delay fuel-economy standards for cars put in place by the Obama administration, and is tussling with California over its ability to set even higher standards. Carmakers, who are the alleged beneficiaries of the proposal, are lukewarm or outrightly opposed to the idea. Oil producers, however, are elated. This is despite frequent pronouncements from the current EPA on the virtues of "co-operative federalism" in environmental policy and the undesirability of "dictating one-size-fits-all mandates from Washington". That outlook seems to apply more when states are racing to get rid of regulations than when they are trying to add more.

America accounts for 15% of global emissions. The states and cities passing ambitious climate-change programmes account for a fraction of this fraction. Emissions have declined from historical levels in America due simply to costs—natural gas has become cheaper, and the cost of renewables has dropped significantly. In the past decade the cost of wind energy has fallen by 50%, while that of solar energy has dropped by more than 80%. States and cities can depress this national trajectory a bit further.

A bifurcated country, in which prosperous Democratic states with hefty environmental rules go one way and Republican-leaning states go another, is not ideal. But state programmes will generate valuable know-how before the rest of the country moves, says Severin Borenstein, an economist at the University of California, Berkeley. They will also provide an example for the rest of the world to study. China accounts for nearly twice as many greenhouse-gas emissions as America. Chinese bureaucrats have dropped in on California to inspect its programme many times. ■