author. REGULATORY POLICY PROGRAM The Regulatory Policy Program at the Mossavar-Rahmani Center for Business and Government provides an environment in which to develop and test leading ideas on regulation and regulatory institutions. RPP’s research aims to improve the global society and economy by understanding the impacts of regulation and creating better decisions about the design and implementation of regulatory strategies around the world. RPP’s efforts are organized around the following three core areas: regulation, markets, and deregulation; regulatory instruments; and regulatory institutions and policymaking.

Climate Change came into force, but without participation by the United States. Its impacts on emissions of greenhouse gases — including carbon dioxide (CO 2) , the primary anthropogenic driver of climate change — will be trivial; but scientific (Robert T. Watson 2001) and economic analyses (Charles D. Kolstad and Michael A. Toman 2001) point to the need for a credible international approach. Because the Kyoto Protocol’s ambitious targets apply only to the short term (2008-2012) and only to industrialized nations, the agreement will impose relatively high costs and generate only modest short-term benefits while failing to provide a real solution (Joseph E. Aldy et al. 2003). For these reasons, most economists see the agreement as deeply flawed (Richard N. Cooper 1998; David G. Victor 2001; Warwick J. McKibbin and Peter J. Wilcoxen 2002), although some see it as an acceptable first step (Axel Michaelowa 2003). Virtually all agree, however, that the Protocol is not sufficient to the overall challenge. We describe the basic features of a post-Kyoto international global climate agreement, which addresses three crucial questions: who, when, and how. The respective elements are: first, a means to ensure that key nations — industrialized and developing — are involved; second, an emphasis on

California is in the process of implementing a broad portfolio of policies and regulations aimed at reducing greenhouse gas emissions. This paper summarizes the initiatives likely to impact the electricity generating sector. We present calculations showing that there is a substantial risk that two of the most prominent policies could simply result in a reshuffling, on paper, of the electricity generating resources within the West that are dedicated to serving California. This reshuffling is different from the conventional leakage problem as it involves no physical changes to the way electricity is generated across regulated and unregulated regions, but is instead driven by a contractual reshuffling of who buys power from whom. The problem is similar to an ineffective consumer boycott. The problem is still present but less severe if more Western states adopt carbon limitations. We also show that some of the least market-based initiatives, the renewable portfolio standards (RPS), are likely to have the biggest near-term impact on the carbon-intensity of electricity generation in the West. Thus the scale of RPS programs may be limiting the potential role of non-renewable options in reducing carbon emissions from the electricity sector.

We will likely see increasing efforts to minimize leakage of carbon to non-participating countries and to address concerns on behalf of the competitiveness of carbon-intensive industry. Environmentalists on one side and free traders on the other side fear that border measures such as tariffs or permit-requirements against imports of carbon-intensive products will collide with the WTO. There need not necessarily be a conflict, if the measures are designed sensibly. There are precedents-- the shrimp-turtle case and the Montreal Protocol-- that could justify border measures to avoid undermining the Kyoto Protocol or its successors, if the measures are carefully designed. But if the design is dominated by politics, as is likely, import penalties are likely to run afoul of the WTO, to distort trade, and perhaps even to fail in the goal of preventing leakage. Border measures should follow principles along the following lines: • They should follow guidelines multilaterally-agreed by countries participating in the emission targets of the Kyoto Protocol and/or its successors, against countries that are not doing so, rather than being applied unilaterally or by non-participants. • Measures to address leakage to non-members can take the form of either tariffs or permitrequirements

Abstract. Over 250 respondents – graduate students in law and public policy – assessed the risks of climate change and valued climate-change mitigation policies. Many aspects of their behavior were consistent with rational behavior. For example, respondents successfully estimated distributions of temperature increases in Boston by 2100. The median value of best estimates was 1–3 degrees Fahrenheit. In addition, people with higher risk estimates, whether for temperature or related risks (e.g., hurricane intensities) offered more to avoid warming. Median willingness to pay (WTP) to avoid global warming was $0.50/gallon, and 3 % of income. And important scope tests (e.g., respondents paid more for bigger accomplishments) were passed. However, significant behavioral propensities also emerged. For example, accessibility of neutral information on global warming boosted risk estimates. Warming projections correlated with estimates for unrelated risks, such as earthquakes and heart attacks. The implied WTP for avoidance was much greater when asked as a percent of income than as a gas tax, a percent thinking bias. Home team betting showed itself; individuals predicting a Bush victory predicted smaller temperature increases. In the climate-change arena, behavioral decision tendencies are like a fun-house mirror: They magnify some estimates and shrink others, but the contours of rational decision remain recognizable. 1.

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design elements of a scientifically sound, economically rational, and politically pragmatic post-2012 international policy architecture for global climate change. It draws upon leading thinkers from academia, private industry, government, and non-governmental organizations from around the world to construct a small set of promising policy frameworks and then

The authors would like to thank for support the Sustainability Science Program, funded by Italy’s

California is in the process of implementing a broad portfolio of policies and regulations aimed at reducing greenhouse gas emissions. This paper summarizes the initiatives likely to impact the electricity generating sector. We present calculations showing that there is a substantial risk that two of the most prominent policies could simply result in a reshuffling, on paper, of the electricity generating resources within the West that are dedicated to serving California. This reshuffling is different from the conventional leakage problem as it involves no physical changes to the way electricity is generated across regulated and unregulated regions, but is instead driven by a contractual reshuffling of who buys power from whom. The problem is similar to an ineffective consumer boycott. The problem is still present but less severe if more Western states adopt carbon limitations. We also show that some of the least market-based initiatives, the renewable portfolio standards (RPS), are likely to have the biggest near-term impact on the carbon-intensity of electricity generation in the West. Thus the scale of RPS programs may be limiting the potential role of non-renewable options in reducing carbon emissions from the electricity sector.

We describe three essential elements of an effective post-2012 international global climate policy architecture: a means to ensure that key industrialized and developing nations are involved in differentiated but meaningful ways; an emphasis on an extended time path of targets; and inclusion of flexible market-based policy instruments to keep costs down and facilitate international equity. This architecture is consistent with fundamental aspects of the science, economics, and politics of global climate change; addresses specific shortcomings of the Kyoto Protocol; and builds upon the foundation of the United Nations Framework Convention on Climate Change.