Climate Policy in a Post-Trump World

This post was originally posted on The Energy Collective

I’m a liberal, and like most urban millennials I care a great deal about climate change. While I had entertained the idea of a President Trump, I didn’t recognize the reality until it was too late. As reality sunk in, I had to question what a Trump presidency could mean for action on climate change. In a nutshell, it’s bad, and we need to act quickly.

Rather than twiddling our thumbs and standing idle while the Federal Government turns a blind eye on climate change, we need to unite behind emission reduction systems currently in place, and ensure that strong policies and frameworks for action will be in place and strengthened over the next four years. This largely means uniting behind California.

A Quick Summary of California

California is the only economy that you can really look to when it comes to climate change policy. California accounts for around 14% of the US economy, while simultaneously having a legal requirement to reduce greenhouse gas emissions to 40% below 1990 levels by 2030. California’s cap-and-trade program also regulates emissions from more economic sectors than any other programs while still maintaining a high price on carbon.

The California Air Resources Board, the agency primarily responsible for climate change regulation, has a budget of over 600 million dollars dedicated to addressing and administering climate change programs. Compare this budget to the 280 million that the US Environmental Protection Agency has (note: the EPA budget is unlikely to remain in place under the Trump administration). California is using this budget, and a staff with decades of experience in environmental regulation, to lead the way in climate policy, building off of, setting, and improving upon federal provisions.

California is aiming for over 4 million Zero Emission Vehicles (electric vehicles) in the state by 2030, alongside major reductions in methane emissions from dairies, and an immense expansion of renewable electricity generation while simultaneously reducing the carbon intensity of transportation fuel.

To achieve these changes, California is relying primarily on two market-based mechanisms: Cap-and-Trade Policy and the Low Carbon Fuel Standard. These programs are a big deal, redirecting billions of fossil-fuel-dollars toward clean energy investment. These programs are currently the best-implemented policy approaches for efficiently addressing climate change.

One Nation Under Trump

In a Trump world, the EPA is in bad shape. A climate skeptic leading the EPA means that regulatory action to reduce GHG emissions cannot be expected. The Clean Power Plan, Obama’s big push for addressing climate change by reducing emissions from electricity generation, is currently being litigated in the court system, and a Trump presidency is unlikely to improve the court outcomes.

The other major federal climate policy in place is the Renewable Fuel Standard (RFS), which reduces GHG emissions from transportation fuel by incentivizing the use of alternative, renewable fuels over gasoline and diesel. Trump has had polarizing statements on the RFS, sometimes looking to scale it back or weaken it, while at other times promoting the use of domestically-produced fuel. Whatever the case, a weakened EPA with a dramatically reduced budget is in no state to reform and push the RFS forward in terms of mitigating GHG emissions.

With a president that is openly hostile toward climate policy, we cannot expect any beneficial federal policies in the next four years, which means it is up to the states to move forward on climate policy.

Uniting Behind California

While it is possible for other states to define their own programs that address climate change, it can be very hard and expensive. California’s programs have a dedicated budget of over $600 million. This budget allows for dozens of full-time staff members to assess, analyze, and administer each program. Other states simply do not have this capacity, and are unlikely to develop it.

Furthermore, California has already started linking their major programs to other regions. Cap-and-Trade has established links to programs in Canada, and California’s Low Carbon Fuel Standard framework and implementation is being heavily relied upon by Oregon, with future linkages possible to Canada.

While California’s policies are established, large, and smoothly operating, the more important reason to unite behind California’s policies is due to politics. The ever-fickle nature of the political environment means that these policies need constant political support.

Right now, California has authority and the political will to take action on climate change. If the social cost of these programs goes up substantially, without providing flashy benefits that politicians can showcase in California (something difficult when tackling a global environmental problem), California policy could falter.

We’ve seen policies, like the Renewable Fuel Standard, directly overhauled when costs escalate to a politically difficult level. California policy is cheaper to comply with as long as federal policies stack on top of it – production tax credits lower the cost of wind and solar energy, and the Renewable Fuel Standard reduces the cost of compliance for the Low Carbon Fuel Standard. If federal policies go away, that means California policies become more expensive. More expensive policy is not a good thing for California, and it is especially not a good thing if the rest of the world is looking to California as a model for successful climate policy.

That means that other states and local jurisdictions need to unite behind California policy. California needs to gain support from local jurisdictions to obtain a 2/3rds majority vote in the legislature to definitively go forward with Cap-and-Trade after 2020.

Meanwhile, states other than California need to link with and build on California’s current policies. These links help lower compliance costs for all jurisdictions while supporting GHG emission reduction goals. Low-carbon policies can even be win-win; local production incentives in jurisdictions outside of California, like the Tesla gigafactory, can help create local job benefits while simultaneously bringing in California dollars. This sort of approach helps drive technology innovation, lowers California compliance costs (improving the political tractability of policies), and helps mitigate GHG emission reductions. Without federal climate action, California is our best hope.