Climate policy is in a state of near crisis. Cap-and-trade is dead in US politics for now. Analysts and advocates, focused for so long on that approach, are largely bereft of credible alternatives. It has become fashionable to advocate instead for energy innovation or for "making clean energy cheap." But unlike cap-and-trade, these are not policies: They are goals. Advocates of energy innovation--and advocates for cap-and-trade--need to put new policies on the table.
- • Brainstorming a New Approach to Climate Policy
- • Innovate First, Regulate Later
- • Time for Climate Hawks to Take to the Hills?
- • Tech Will Solve the Climate Crisis Faster Than Laws
- • Don't Screw Up Natural Gas
- • A Clean-Tech Revolution in Four Easy Steps
- • The Other Good Thing About Fighting Climate Change
As Shellenberger and Nordhaus point out, government support for clean-energy innovation is essential to bringing down the cost of cutting emissions, and to making meaningful carbon pricing more politically palatable down the road. Alas, the political prospects of increased government support for clean-technology innovation are weak in the near term. Congress has little appetite for new spending; even the gambit of supporting energy innovation through the defense budget, which should be tried, may fail in an austere fiscal environment. Tax incentives hold more political promise, but they may also be tougher to target effectively.
I see no reason to reinvent long-term climate policy in reaction to short-term political and economic trends. Rob Stavins argued persuasively last month that cutting emissions by 80 percent by 2050 cannot be done in an economically acceptable way without pricing carbon. Cutting emissions that deeply will require changes in every part of the economy. Support for technology development will not spare the government the task of disincentivizing high-emissions activities. Carbon pricing is the only way that government can stay out of the messiest details.