Cap and Trade Climate Policy and U.S. Economic Adjustments

No one would disagree with the importance and necessity of preserving the environment while promoting economic growth. However, no informed decision on any energy and environmental policy can be made without knowing its economic costs and environmental effectiveness. Against this background, several key empirical and design issues come to mind, of both scientific interest and policy relevance. * Given that emissions trading scheme has been a pillar in the EU climate policy and is going to be core in any future U.S. climate policy, how can that scheme be designed to avoid imposing unnecessarily high costs? * Given that coal creates fewer energy security concerns than do oil and natural gas because of its wide distribution among developed and developing countries, how will that industry be affected by future carbon constraints? * Given the crucial role that technology is playing in avoiding dangerous climate change impacts, can history shed some light on the contribution of technological change to greenhouse gas emissions so that we can infer the size of the challenges ahead? * Will the current impasse in international climate negotiations promote another look at alternatives to the Kyoto-style targets and timetables approach? This special issue features the selected contributions from the Past President of the American Economic Association and seventeen other eminent analysts at Harvard, MIT, Princeton, Syracuse, Northeastern, University of Paris 10, Free University Amsterdam, Fondazione Eni Enrico Mattei, University of Venice, Australian National University, etc. The value of the special issue is in the insights to be gained from the wealth of these analyses, not the details of particular numerical results. Those insights not only contribute to deepening our understanding of the key issues in the climate and energy policy debate, but also help to formulate mutually supportive energy and climate policies to address the twin threats of energy security and climate change concerns.