Discussion Paper

US Climate Policy Developments

Oct 31, 2007 | Toshi Arimura, Dallas Burtraw, Alan J. Krupnick, Karen L. Palmer


This paper outlines recent developments in U.S. climate policies. Although the United States does not participate in the Kyoto Mechanism, a number of climate policies are being implemented at state levelas well as at the federal level. First, we report and compare the federal cap and trade proposals in the 110th Congress. Then, the paper illustrates the current situations of state level climate policies, such as the Regional Greenhouse Gas Initiative in the northeastern states or AB32 in California. We analyze these proposals from the viewpoint of technology policies and impacts on international markets. It is found that technology policies play important roles in the cap and trade proposals and that there is a great expectation for carbon capture and sequestration (CCS) technology. In terms of the impacts on international markets, several federal proposals as well as regional programs permit trading in international markets. As emission targets become more stringent in the future, U.S. GHG emitters are more likely to interact with these markets. Thus, despite the lack of U.S. participation in the Kyoto Protocol, U.S. markets will be linked to foreign markets, at least, in an indirect way.