U.S. Climate Policy Explained: What Americans Need to Know
To better understand the current state of U.S. climate policy, we spoke to one of RAND’s foremost climate policy experts.
According to the Pew Research Center, over 60 percent of Americans believe that climate change is affecting their community directly. Three-quarters of Americans support U.S. participation in global efforts to curb climate change. Although climate has not been at the forefront of either presidential campaign, it remains a critical issue to voters.
To better understand the current state of U.S. climate policy and what to look for in the months and years ahead, we spoke to one of RAND’s foremost climate policy experts.
Benjamin Preston is director of Community Health and Environmental Policy at RAND and the director of the RAND Center for Climate and Energy Futures. He is also a senior policy researcher and professor at Pardee RAND Graduate School. From 2021 to 2023, Preston took a leave of absence from RAND to serve as the assistant director for Climate Services and Adaptation in the White House Office of Science and Technology Policy. Previously, he held research positions with the Climate Change Science Institute at Oak Ridge National Laboratory, the CSIRO’s Division of Marine and Atmospheric Research, and the Pew Center on Global Climate Change.
What are the key components of the current federal climate policy proposals, and how do these aim to reduce greenhouse gas emissions?
Under the 2015 Paris Agreement, which is the international policy framework governing action on climate change, the United States has committed to reducing its greenhouse gas emissions by 50–52 percent below 2005 levels by 2030 (PDF). While U.S. emissions have been trending downward for over a decade, achieving this target will require more aggressive action throughout the economy. This means reducing emissions across different sectors — from electricity generation, buildings, transportation, industrial activity, and the food system — spanning federal, state, and local action.
The federal government has largely used financial incentives to encourage climate-friendly behavior. These have largely taken two forms: First, under Executive Order 14008, the Biden Administration indicated that those entities applying for federal funding across a broad range of programs should demonstrate that they are taking steps to minimize greenhouse gas emissions, while also ensuring those investments are resilient to current and future climate conditions. Second, spending bills such as the Bipartisan Infrastructure Law and the Inflation Reduction Act provide significant financial incentives for new clean energy projects, such as solar and wind power, battery storage and electric vehicles, and charging infrastructure. The result of all of this is to effectively lower the risk for the private sector to invest in new clean energy projects.
The federal government has largely used financial incentives to encourage climate-friendly behavior.
How do these proposals and bills differ from previous climate legislation attempts, and what lessons have been learned from past efforts?
This reliance upon financial carrots rather than regulatory sticks to achieve emissions reductions is a significant departure from the prior 20 years. For years, the assumed policy tool was the use of market-based mechanisms, such as setting caps on greenhouse gas emissions from different industries, accompanied by programs that enabled the trading of emission permits to achieve overall reductions. These cap-and-trade frameworks were modeled off other successful pollution reduction programs — such as the sulfur dioxide trading program established under the Clean Air Act — and many argued that this would be an economically efficient way to reduce emissions. However, despite the implementation of such schemes at the regional and state level (including the Northeast Regional Greenhouse Gas Initiative, California’s cap-and-trade program, and New York State’s Cap-and-Invest program), federal cap-and-trade legislation never got sufficient traction in Congress and was never implemented.
How might future administrations impact the continuity and effectiveness of current climate policies?
U.S. greenhouse gas emissions peaked in 2007 and have been on a downward trajectory ever since, despite continued energy demand and economic growth. Therefore, multiple administrations have presided over what we now recognize to be a historic transition in the nation’s energy system. Much of the reduction in emissions has been a function of improvements in technology, which have increased the efficiency of the economy, along with market forces, which have driven the retirement of a significant fraction of the nation’s coal-based electricity generation capacity. While some of those developments have been enhanced by federal policy (efficiency standards in vehicles and appliances, for example) U.S. emissions continue to trend downward in the absence of any economy-wide regulatory policy.
This suggests that progress on reducing emissions is not necessarily contingent on the actions of a single administration or political party. That said, the overarching concern with respect to reducing future climate risk is accelerating emissions reductions worldwide. The ability to move aggressively and in concert with partners in the international community can certainly be aided by federal leadership. Maintaining a consistent, long-term policy agenda on climate will make the energy transition more efficient, will aid business and the private sector in planning their investment strategies, and will make it easier to work in coordination with our friends and allies.
What challenges exist in achieving cohesive climate action across different levels of government?
Climate change is frequently referred to as a global challenge. But its specific harms, or the cost of addressing climate change, are not distributed equally around the world, or even across the United States. Because cities are where people, infrastructure, and economic activity are concentrated, it’s our urban areas that are responsible for the vast majority of U.S. greenhouse gas emissions. Many, but not all, cities have been working consistently for decades to enhance sustainability, increase resilience, and reduce their contributions to climate change. Likewise, some states have emerged as laboratories for progressive climate policy, while others have not. As a result, we have a complex patchwork of policy positions across the United States, with households and businesses having to operate under different rules in different locations. In the absence of federal policy to set a level playing field, this state of affairs is likely to persist for the foreseeable future. However, when we look at a list of states that are leaders in renewable energy, it includes not only the usual suspects like California and Washington, but also Texas and Iowa. Increasingly, policies and investments that benefit the climate can be justified purely on economic rather than environmental criteria.
How might recent and upcoming Supreme Court decisions impact the scope and authority of federal climate regulations?
The judicial branch sat on the sidelines of the climate change issue for many years, but it’s starting to become an active player. We are seeing a rising number of lawsuits seeking to compel greater consideration for climate risk and greenhouse gas emissions from businesses as well as governments. Meanwhile, efforts to pursue more stringent emissions regulation from industry often face legal challenges. President Obama’s Clean Power Plan set carbon pollution limits for U.S. power plants, but was immediately challenged in the courts and the subsequent Trump Administration initiated action to repeal the regulation. In 2022, the Supreme Court curbed the U.S. Environmental Protection Agency’s ability to regulate carbon emissions, thereby removing the legal basis for the Clean Power Plan.
More recently, environmental policy again found its way before the Supreme Court. The 2024 Loper Decision overturned a longstanding legal decision dubbed “Chevron deference.” Established in 1984 by Chevron U.S.A. vs. Natural Resources Defense Council, the Chevron deference doctrine established that when there were legal disputes regarding the interpretation of environmental regulations, the courts would defer to federal agencies. The argument at the time was that, given their access to relevant expertise, federal agencies are better positioned to make sound, unbiased decisions regarding application of federal environmental policies. The reversal of this doctrine shifts authority for interpretation back to the courts. Environmental advocates have argued that this could expose environmental policy to judicial activism and bias. However, Chevron deference places power in the hands of the Executive Branch, which may be subject to executive influence. Hence, while the Supreme Court can play an outsized role in shaping federal responses to climate change, the role it actually plays will be decided, not surprisingly, on a case-by-case basis.
What is the largest source of the pollution in the country that’s driving dangerous climate change?
Greenhouse gas emissions in the United States can be attributed to a range of activities, but these are commonly grouped into five sources. The first is the transportation sector — vehicles, aircraft, and shipping — which accounts for roughly 30 percent of emissions. Second is the production of electricity, which accounts for roughly a quarter of emissions. Despite rapid growth in renewable energy, much of the nation’s electricity is still generated by fossil fuels, specifically natural gas and coal. That electricity is subsequently used throughout the economy, particularly in residential and commercial buildings. However, buildings generate emissions from other sources, such as the burning of fuel for heating, cooking, and other appliances — and that generates almost 15 percent of emissions. Industrial activity, such as the production of steel and cement, accounts for another quarter of emissions. The remaining 10 percent is associated with agricultural activity, including energy use on farms and land use practices.
What role does federal policy play in promoting research and development in climate science and technology?
The federal government is a major investor in research and development that can aid in tackling the climate crisis. The United States is a world leader, for example, in fundamental Earth system and climate science that gives us important insights regarding the rate of climate change and its consequences for both the natural environment and human society. The nation’s science agencies — such as DOE, NASA, NOAA, USGS, and USDA — are key research sponsors of such work. Meanwhile, federally funded research and development have also been core drivers of innovations in clean energy technologies, such as solar and wind power, which now comprise the bulk of the nation’s new electricity generation capacity. Federal investments accelerate innovation and drive commercialization, which in turn enables new technologies to scale up and drive down costs. That said, the private sector increasingly has an important role to play in climate change science. One case in point is climate data and information, which is increasingly being developed and disseminated by private companies to meet the needs of specific users.
How do current climate policies address the disproportionate impact of environmental issues on marginalized communities? And what steps are being taken to ensure that the benefits of green policies are equitably distributed across different socio-economic groups?
Poor and marginalized communities often bear a disproportionate burden of environmental threats, including climate-related risks. This environmental justice challenge has long been recognized, yet only recently has there been federal policy seeking to address the nation’s environmental justice challenges head on. The signature policy to promote environmental justice under the Biden Administration has been the Justice 40 initiative. J40 seeks to secure 40 percent of the overall benefits of certain federal climate, clean energy, affordable and sustainable housing, and other investments flow to disadvantaged communities. The administration has developed criteria for defining what constitutes a disadvantaged community and is using those criteria to prioritize communities for federal investment. Not only does this approach provide a mechanism for channeling federal dollars into communities that may have missed out previously, but it also seeks to try and reverse past damage caused by unfair and discriminatory decisions. However, given the sheer number of federal programs, and the fact that federal investments are often distributed to states who decide how they will ultimately be used, evaluating whether J40 has achieved its goals will be a challenge.
Poor and marginalized communities often bear a disproportionate burden of environmental threats, including climate-related risks.
What strategies are being implemented to enhance the resilience of infrastructure and communities to the impacts of climate change?
The Biden Administration’s Executive Order 14008 called for infrastructure constructed with federal funds to be resilient against future climate. While that policy set a new standard for future infrastructure projects, the United States has benefited from long-term improvements in climate resilience for some time. For example, steady advances in building codes, materials, and building energy efficiency mean that today’s built environment is far more resilient than in years past. Nevertheless, much of our infrastructure was designed and built when both the climate and society’s approach to resilience were different. This leaves our cities, towns, and critical lifeline services vulnerable to climatic threats. A major challenge lies ahead in terms of increasing the resilience of this legacy infrastructure.
How is the effectiveness of climate policies being measured and reported?
Climate policy involves multiple actors at multiple scales seeking to intervene in a diverse array of industries and practices. That means that evaluating the net impact poses significant methodological challenges. At the most macro level, success can be judged by changes in the nation’s greenhouse gas emissions, which are routinely monitored and reported by federal, state, and local agencies. One can also look upstream, at the deployment or retirement of different types of energy technologies, or new business formation or job creation, as indicators of the pace of the energy transition.
Still, it’s hard to attribute any trends to specific policy interventions. For example, the Inflation Reduction Act is anticipated to accelerate efforts to decarbonize the U.S. economy. But our ability to disentangle its effects from other drivers of change — such as market forces and other interventions — may be limited. Policymakers would benefit from having better tools to understand the benefits of federal investment at the local to regional level, so we can attribute a given outcome to a specific policy intervention.
This originally appeared on rand.org on September 26, 2024.
