Preserving Additionality of Complementary GHG-Reduction Actions Under Waxman-Markey

Abstract

Although the Waxman-Markey bill that is before the House of Representatives falls short of the "science-based" targets sought by climate scientists, complementary actions by states, cities, corporations and individuals could help move the nation closer to the goal of climate sustainability. But the House bill, as currently written, would perversely deter complementary GHG-reduction efforts because it does not provide adequate mechanisms for ensuring that such actions will actually lead to additional emission reductions. Instead, the reductions could simply result in a transfer of emission rights between regulated entities.

Keywords: Waxman-Markey, cap-and-trade

JEL Classification: K32, O38, Q28, Q48