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Recent history could be a useful guide for U.S. lawmakers grappling with solutions to global warming. In a new policy brief produced by the Harvard Environmental Economics Program (HEEP), researchers argue that the cap-and-trade system developed by the Clean Air Act Amendments of 1990 to combat the threat of acid rain should serve as a model for Congress and the White House, when they decide to address climate change.
"The SO2 Allowance Trading System and the Clean Air Act Amendments of 1990: Reflections on Twenty Years of Policy Innovation" is co-authored by Robert Stavins, Albert Pratt Professor of Business and Government; Robert Stowe, executive director, HEEP; Gabriel Chan, Giorgio Ruffolo Doctoral Fellow in Sustainability Science, HKS; and Richard Sweeney, Ph.D. Student in Public Policy, HKS. The paper draws upon discussions held at a workshop at Harvard last year.
"The recent climate debate has taken place in a political context that is much different than that of the CAAA of 1990," the authors admit. "Recent hostility toward cap and trade in U.S. climate legislation may reflect the broader political environment of the climate debate more than it reflects the substantive merits (or demerits) of market-based regulation."
The authors argue that a cap-and-trade system designed to combat global climate change will require even a greater degree of bipartisan cooperation than was required to pass the Clean Air Amendments in 1990. Unlikely as that is, they write, lessons learned over the past two decades should serve as important components in the current policy debate.
"The stakes for a broad-based GHG [greenhouse gas] policy—economic, political, and environmental—are much higher than they were for SO2 policy in 1990," the authors conclude. "While the debate over federal policy to address climate change is currently in hiatus, the lessons of the SO2 allowance-trading program will prove useful and relevant to future deliberations about climate change policy when the time arrives for serious reflection."
Robert Stavins, Albert Pratt Professor of Business and Government
"Recent hostility toward cap and trade in U.S. climate legislation may reflect the broader political environment of the climate debate more than it reflects the substantive merits (or demerits) of market-based regulation," write the authors.