Imagining the Unimaginable: Reducing U.S. Greenhouse Gas Emissions by Forty Percent

Abstract:     
Many Americans do not believe that greenhouse gas (GHG) emissions can be materially reduced, let alone reduced without significant economic hardship. Economic models that predict enormous costs to mitigate climate change reflect a belief this time transformative innovation will not appear. They do not include the historic pattern that once environmental mandates are imposed, fierce market forces are unleashed that produce rapid innovation, and that implementation costs generally plummet to a level far below what the models predicted. Predictions and policy choices should be based on how markets actually respond to new environmental requirements. A review of efforts in California, and elsewhere, demonstrates that when an appropriate portfolio of new energy laws and policies are implemented, inefficiently used energy can be harvested from the energy system at low cost, no lose of function, and result in net economic gains to the state’s economy. The innovation spurred by their energy policy reforms reduced their per capita GHG emissions to a level about 40% below the national average. If these energy law reforms were implemented across the nation, the United States could cut its energy use and GHG emissions, improve its competitiveness in international markets, and maintain the level of energy services our citizens expect. This article surveys these efficiency possibilities, identifies the legal and policy barriers that systematically obstruct these possibilities, and suggest some policy prescription.

Number of Pages in PDF File: 20

Keywords: Greenhouse Gas, energy efficiency, Environmental Law, Climate Change, Energy Law, Emissions, mitigation, eneergy policy

JEL Classification: K32, L94,O21, Q4, Q40, Q42, Q43, Q48

Accepted Paper Series