Accounting for Political Feasibility in Climate Instrument Choice

27 Pages Posted: 23 Feb 2013 Last revised: 17 Mar 2014

See all articles by Jonathan M. Gilligan

Jonathan M. Gilligan

Vanderbilt University - Department of Earth and Environmental Sciences; Department of Civil and Environmental Engineering; Vanderbilt Institute for Energy and Environment

Michael P. Vandenbergh

Vanderbilt University - Law School

Date Written: February 18, 2013

Abstract

This Essay argues for consideration of political opportunity costs in the criteria used to evaluate climate policy instruments. Law and policy debates typically evaluate policy instruments by their expected performance after adoption, tacitly excluding consideration of the timing of adoption. Under this standard, a comprehensive carbon pricing instrument, either in the form of a cap and trade program or a carbon tax, has emerged as the preferred approach. Yet by excluding the political process from consideration, this standard obscures the effects of political feasibility on the timing of adoption. For many problems, the advantages of an optimal policy outweigh the advantages of a sub-optimal one that will require less time and effort to adopt. The climate problem is different: the irreversibility of climate change, the possibility of tipping points in the climate system, and lag times in infrastructure investments combine to impose large costs on delay. Excluding political opportunity costs from instrument evaluation leads to a preference for slow, comprehensive remedies. The casualties in this process are incremental instruments that could buy time, facilitate the adoption of additional instruments, and complement those instruments after they are adopted. This Essay proposes explicit consideration of political opportunity costs in evaluating climate policy instruments and applies this approach to several leading climate policies.

Keywords: instrument choice, climate change, environmental law, decision heuristics, second best

Suggested Citation

Gilligan, Jonathan M. and Vandenbergh, Michael P., Accounting for Political Feasibility in Climate Instrument Choice (February 18, 2013). Vanderbilt Public Law Research Paper No. 13-7; Vanderbilt Law and Economics Research Paper No. 13-4. Available at SSRN: https://ssrn.com/abstract=2220788 or http://dx.doi.org/10.2139/ssrn.2220788

Jonathan M. Gilligan

Vanderbilt University - Department of Earth and Environmental Sciences ( email )

VU Station B #351805
2301 Vanderbilt Place
Nashville, TN 37235-1805
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615.322.2420 (Phone)
615.322.2138 (Fax)

HOME PAGE: http://https://www.jonathangilligan.org/

Department of Civil and Environmental Engineering ( email )

2301 Vanderbilt Place
Nashville, TN 37240
United States

Vanderbilt Institute for Energy and Environment ( email )

2301 Vanderbilt Place
Nashville, TN 37240
United States

Michael P. Vandenbergh (Contact Author)

Vanderbilt University - Law School ( email )

131 21st Avenue South
Nashville, TN 37203-1181
United States

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