Assessing Which Policy Tool(s) Can Most Effectively and Efficiently Support a National Strategy to Mitigate Climate Change

Includes bibliographical references (pages 78-84).The circumstances of climate change exist on a global platform and result from anthropogenic emissions from all human activities. Changing human behavior across the board is the only real way to mitigate climate change. This paper attempts to determine which tool(s) would be the most ideal with which to construct a national policy to reduce greenhouse gas (GHG) emissions as well as considering a possible policy design. Although the literature review most commonly recommended market-based tools for such purposes, emission trading in particular, a number of tools were included in this assessment: market-based (emission trading & a carbon tax), command and control (social regulation & direct government), grants, loans, and tax expenditures. The list of tools were based on a subset of those presented in Lester Salamon's The Tools of Government, which also provided corresponding assessments of each tool's effectiveness and efficiency. Using this rubric, I compare the circumstances in which a tool was most effective and / or efficient with the circumstances surrounding climate change. I determined the extent to which a tool could attain an objective by measuring it against a set of criteria within each objective: inherent ability, environmental-effectiveness, and cost effectiveness. Market-based tools were confirmed to possess the highest potential to provide the most environmentally effective and cost-effective means to mitigate climate change. Of the two types, emission trading appears slightly more ideal than a carbon tax because it can provide more certainty than taxes in the effort to attain a specific environmental target, such as a particular level of national GHG emissions. Having established the superiority of an emission trading policy, I turned to the longest running and largely successful emission trading program in operation - the Acid Rain Program (ARP) - to explore what could be learned and leveraged from its design and implementation that might apply to greenhouse gas (GHG) emissions. My analysis finds that the ARP design would ultimately provide a relevant foundation for a national GHG emission trading policy. However, perhaps more importantly, the analysis highlights the significant differences in the emission sources of acid rain vs. GHGs