Policy Initiatives
Overview of Policy Work
CRS's policy work promotes progress on the interrelated challenges of reversing global warming and advancing clean renewable energy development.
The global scope of climate change and the catastrophic impacts it will cause will be unprecedented if current energy and emission trends continue. In order to avoid these consequences, humanity must transition to a low carbon way of life in the short span of a few decades. The good news is that investing in clean energy will lay the foundation for economic recovery and long term prosperity, and investments in energy efficiency that reduce pollution will also lower energy bills and save money for families, businesses, and government alike. To meet the challenge of reversing global warming, CRS's policy work seeks to ensure that bold policies to advance clean energy development and reduce greenhouse gas emissions are carried out effectively and equitably.
Energy Policy
Innovation is needed for the long run goal of near-zero emissions of heat-trapping gases, however currently available renewable energy technologies can get us started reducing our emissions. In the energy sector, we support a mix of standards, incentives, loan guarantees, and other measures to accelerate investment in renewable energy and energy efficiency. For example, CRS supports establishment of an ambitious federal renewable electricity standard that both enforces aggressive minimum state standards and enables states to meaningfully go beyond the minimum requirement.
Climate Policy
CRS emphasizes clean renewable energy as a key climate solution strategy in part because it also offers a host of non-climate related benefits: better overall air quality, improvements in public health resulting in lower health care costs, economic development through domestic investment in new clean industries, improved energy security, and a diversified energy supply less vulnerable to fossil fuel price spikes. Moreover, clean energy innovation is critical if humanity is to simultaneously reduce emissions of heat trapping gases while responding to the global demand for poverty reduction and improvement in living standards.
Though clean energy must be a core climate solution, emissions of heat-trapping gases are generated by activity in every sector of the economy. The lack of any cost for pumping greenhouse gases into the atmosphere, the widespread distribution of their sources, and the potentially devastating impacts of unabated global warming have led to climate change being called "the greatest market failure of all time." One important aspect of climate policy is the correction of this lack of any price on emissions of heat-trapping gases. This can be accomplished either through the establishment of a cap-and-trade program or a carbon tax. CRS promotes the development of a well-designed cap-and-trade program whereby overall pollution levels are driven down by the requirement that major polluters must hold tradable emission permits. Under cap-and-trade, the cap is determined by the total number of tradable permits created and reductions are achieved by reducing the number of permits available (i.e. lowering the cap) over time. The tradability of permits provides flexibility and efficiency and their price imposes a cost for emissions of heat trapping gases. While we support a cap-and-trade approach, a carbon tax could be preferable to a poorly designed cap-and-trade program.
A cap-and-trade program can correct the failure of markets to account for pollution from fossil fuel combustion, but it must be supplemented by other policies. In the climate policy arena, sector-specific policies are sometimes called complementary policies because they "complement" a multi-sector policy instrument such as cap-and-trade. The lack of a price on carbon is not the only market barrier or imperfection that interferes with the deployment of renewable energy technologies. An example of these other market barriers includes the problem of split incentives for rental properties in which the landlord purchases many durable appliances but renters pay the energy bills. So savings due to investment in energy efficiency appliances do not go to the investor in the improved equipment, but to the renter instead. This is called the problem of split incentives. Because of these other market barriers, an approach that includes complementary policies along with cap-and-trade can capture low cost reductions that cap-and-trade would miss and will be the most cost-effective approach. Moreover, while cap-and-trade forces the economy to consider the costs of the pollution that causes global warming, cap-and-trade does not account for the many non-climate benefits of clean energy (or energy efficiency). Put differently, cap-and-trade alone does not guarantee optimal deployment of existing renewable energy or other improved technologies.
Cap-and-trade alone also does not guarantee innovation in any particular technological direction, such as renewable energy technology. While many cost-effective climate solutions exist today and can deliver the reductions needed to put us on a pathway to avoiding the most dangerous climate change impacts, we also know that the magnitude of long term reductions needed will require transformational innovation in technologies like renewable energy. For all these reasons, a robust set of complementary policies in the energy sector are necessary to ensure sufficient clean energy progress. Without complementary energy sector policies, there is a risk that clean energy will be insufficiently emphasized in the economy-wide response to global warming.
Encouraging a Vibrant, Effective Voluntary Market
for Environmental Goods
In addition to mandatory policies to drive clean energy development, CRS supports the voluntary market for renewable energy and carbon offsets. The need for a rapid transition to a low carbon economy means that all potential tools must be applied to drive emissions lower; policy must incent all those who would potentially contribute to investing in climate solutions. The voluntary market for renewable energy purchases has been a crucial driver of growth in the development of new renewable energy generation facilities. According to the National Renewable Energy Laboratory, over the five-year period from 2003 to 2007, voluntary renewable energy production delivered more new renewable energy onto the U.S. electric grid than all state-level renewable portfolio standards combined.
CRS has unique expertise in facilitating voluntary actions by individuals and businesses who wish to purchase renewable energy and carbon offset products. CRS's Green-e Energy and Green-e Climate certification programs certify the value of environmental assets traded in the voluntary market. CRS's policy work seeks to ensure that public policies are supportive of voluntary markets for renewable energy and carbon offsets, and that policies are written to incentivize individual action beyond the minimum standards required by law. CRS supports the inclusion of an "off the top" provision in regional and federal cap-and-trade policies to account for voluntary renewable energy purchases. Without such an approach, a cap-and-trade program could cripple the voluntary market for renewable energy. For more about off the top, see the CRS issue brief Support Voluntary Purchases of Clean, Safe, 21st Century Energy With an Off-the-Top Rule Under Cap and Trade.
CRS's policy work is accomplished in three ways:
Informing Policymakers
CRS provides guidance to policymakers on effective policy design and implementation at Federal, Regional and State levels. We participate in stakeholder processes, provide testimony, and submit comment letters in order to communicate our views on optimal policy design. We undertake quantitative analysis of policy relevant questions to inform decisionmaking.
CRS's policy work is supported by the Energy Foundation. This includes our domestic efforts as well as work done in China in collaboration with Ryan Wiser of Lawrence Berkeley National Laboratory that involves the provision of technical assistance to the Chinese government on policies to encourage energy efficiency and the development of clean energy. CRS also sometimes works under contract to provide technical assistance on policy-related questions pertaining to clean energy. For example, for the California Public Utilities Commission, we analyzed the technical feasibility and costs and benefits to California of achieving a 33% Renewable Portfolio Standard.
Informing the Public
We translate technical policy issues to publicly accessible language and present these in form of fact sheets. We participate in conferences and meetings that broadly serve the purpose of education and information dissemination and exchange. This website provides a non-technical overview of climate and energy policy, and our Green-e program provides concrete options for families or businesses that want to become part of the solution to global warming.
Coalition Work
We are currently working in coalitions of public interest nonprofits federally, regionally through the Western Climate Initiative, and in California. On some issues, in particular policies needed to retain a robust voluntary market, we lead, and sometimes we serve as a foot soldier. We work with renewable energy developers to better understand their challenges, to help motivate and organize their participation in stakeholder processes, and to represent their perspective in policy debates. We collaborate with leading academics and researchers.
CRS's policy work promotes progress on the interrelated challenges of reversing global warming and advancing clean renewable energy development.
The global scope of climate change and the catastrophic impacts it will cause will be unprecedented if current energy and emission trends continue. In order to avoid these consequences, humanity must transition to a low carbon way of life in the short span of a few decades. The good news is that investing in clean energy will lay the foundation for economic recovery and long term prosperity, and investments in energy efficiency that reduce pollution will also lower energy bills and save money for families, businesses, and government alike. To meet the challenge of reversing global warming, CRS's policy work seeks to ensure that bold policies to advance clean energy development and reduce greenhouse gas emissions are carried out effectively and equitably.
Energy Policy
Innovation is needed for the long run goal of near-zero emissions of heat-trapping gases, however currently available renewable energy technologies can get us started reducing our emissions. In the energy sector, we support a mix of standards, incentives, loan guarantees, and other measures to accelerate investment in renewable energy and energy efficiency. For example, CRS supports establishment of an ambitious federal renewable electricity standard that both enforces aggressive minimum state standards and enables states to meaningfully go beyond the minimum requirement.
Climate Policy
CRS emphasizes clean renewable energy as a key climate solution strategy in part because it also offers a host of non-climate related benefits: better overall air quality, improvements in public health resulting in lower health care costs, economic development through domestic investment in new clean industries, improved energy security, and a diversified energy supply less vulnerable to fossil fuel price spikes. Moreover, clean energy innovation is critical if humanity is to simultaneously reduce emissions of heat trapping gases while responding to the global demand for poverty reduction and improvement in living standards.
Though clean energy must be a core climate solution, emissions of heat-trapping gases are generated by activity in every sector of the economy. The lack of any cost for pumping greenhouse gases into the atmosphere, the widespread distribution of their sources, and the potentially devastating impacts of unabated global warming have led to climate change being called "the greatest market failure of all time." One important aspect of climate policy is the correction of this lack of any price on emissions of heat-trapping gases. This can be accomplished either through the establishment of a cap-and-trade program or a carbon tax. CRS promotes the development of a well-designed cap-and-trade program whereby overall pollution levels are driven down by the requirement that major polluters must hold tradable emission permits. Under cap-and-trade, the cap is determined by the total number of tradable permits created and reductions are achieved by reducing the number of permits available (i.e. lowering the cap) over time. The tradability of permits provides flexibility and efficiency and their price imposes a cost for emissions of heat trapping gases. While we support a cap-and-trade approach, a carbon tax could be preferable to a poorly designed cap-and-trade program.
A cap-and-trade program can correct the failure of markets to account for pollution from fossil fuel combustion, but it must be supplemented by other policies. In the climate policy arena, sector-specific policies are sometimes called complementary policies because they "complement" a multi-sector policy instrument such as cap-and-trade. The lack of a price on carbon is not the only market barrier or imperfection that interferes with the deployment of renewable energy technologies. An example of these other market barriers includes the problem of split incentives for rental properties in which the landlord purchases many durable appliances but renters pay the energy bills. So savings due to investment in energy efficiency appliances do not go to the investor in the improved equipment, but to the renter instead. This is called the problem of split incentives. Because of these other market barriers, an approach that includes complementary policies along with cap-and-trade can capture low cost reductions that cap-and-trade would miss and will be the most cost-effective approach. Moreover, while cap-and-trade forces the economy to consider the costs of the pollution that causes global warming, cap-and-trade does not account for the many non-climate benefits of clean energy (or energy efficiency). Put differently, cap-and-trade alone does not guarantee optimal deployment of existing renewable energy or other improved technologies.
Cap-and-trade alone also does not guarantee innovation in any particular technological direction, such as renewable energy technology. While many cost-effective climate solutions exist today and can deliver the reductions needed to put us on a pathway to avoiding the most dangerous climate change impacts, we also know that the magnitude of long term reductions needed will require transformational innovation in technologies like renewable energy. For all these reasons, a robust set of complementary policies in the energy sector are necessary to ensure sufficient clean energy progress. Without complementary energy sector policies, there is a risk that clean energy will be insufficiently emphasized in the economy-wide response to global warming.
Encouraging a Vibrant, Effective Voluntary Market
for Environmental Goods
In addition to mandatory policies to drive clean energy development, CRS supports the voluntary market for renewable energy and carbon offsets. The need for a rapid transition to a low carbon economy means that all potential tools must be applied to drive emissions lower; policy must incent all those who would potentially contribute to investing in climate solutions. The voluntary market for renewable energy purchases has been a crucial driver of growth in the development of new renewable energy generation facilities. According to the National Renewable Energy Laboratory, over the five-year period from 2003 to 2007, voluntary renewable energy production delivered more new renewable energy onto the U.S. electric grid than all state-level renewable portfolio standards combined.
CRS has unique expertise in facilitating voluntary actions by individuals and businesses who wish to purchase renewable energy and carbon offset products. CRS's Green-e Energy and Green-e Climate certification programs certify the value of environmental assets traded in the voluntary market. CRS's policy work seeks to ensure that public policies are supportive of voluntary markets for renewable energy and carbon offsets, and that policies are written to incentivize individual action beyond the minimum standards required by law. CRS supports the inclusion of an "off the top" provision in regional and federal cap-and-trade policies to account for voluntary renewable energy purchases. Without such an approach, a cap-and-trade program could cripple the voluntary market for renewable energy. For more about off the top, see the CRS issue brief Support Voluntary Purchases of Clean, Safe, 21st Century Energy With an Off-the-Top Rule Under Cap and Trade.
CRS's policy work is accomplished in three ways:
- Informing Policymakers
- Informing the Public
- Coalition work
Informing Policymakers
CRS provides guidance to policymakers on effective policy design and implementation at Federal, Regional and State levels. We participate in stakeholder processes, provide testimony, and submit comment letters in order to communicate our views on optimal policy design. We undertake quantitative analysis of policy relevant questions to inform decisionmaking.
CRS's policy work is supported by the Energy Foundation. This includes our domestic efforts as well as work done in China in collaboration with Ryan Wiser of Lawrence Berkeley National Laboratory that involves the provision of technical assistance to the Chinese government on policies to encourage energy efficiency and the development of clean energy. CRS also sometimes works under contract to provide technical assistance on policy-related questions pertaining to clean energy. For example, for the California Public Utilities Commission, we analyzed the technical feasibility and costs and benefits to California of achieving a 33% Renewable Portfolio Standard.
Informing the Public
We translate technical policy issues to publicly accessible language and present these in form of fact sheets. We participate in conferences and meetings that broadly serve the purpose of education and information dissemination and exchange. This website provides a non-technical overview of climate and energy policy, and our Green-e program provides concrete options for families or businesses that want to become part of the solution to global warming.
Coalition Work
We are currently working in coalitions of public interest nonprofits federally, regionally through the Western Climate Initiative, and in California. On some issues, in particular policies needed to retain a robust voluntary market, we lead, and sometimes we serve as a foot soldier. We work with renewable energy developers to better understand their challenges, to help motivate and organize their participation in stakeholder processes, and to represent their perspective in policy debates. We collaborate with leading academics and researchers.
