@article{Goulder:93413,
      recid = {93413},
      author = {Goulder, Lawrence H. and Stavins, Robert N.},
      title = {Interactions between State and Federal Climate Change  Policies},
      address = {2010-08},
      number = {838-2016-55742},
      series = {SD},
      pages = {20},
      year = {2010},
      abstract = {Federal action addressing climate change is likely to  emerge either through new legislation or via the U.S. EPA’s  authority under the Clean Air Act.  The prospect of federal  action raises important questions regarding the  interconnections between federal efforts and state-level  climate policy developments.  In the presence of federal  policies, to what extent will state efforts be  cost-effective?  How does the co-existence of state- and  federal-level policies affect the ability of state efforts  to achieve emissions reductions? This paper addresses these  questions.  We find that state-level policy in the presence  of a federal policy can be beneficial or problematic,  depending on the nature of the overlap between the two  systems, the relative stringency of the efforts, and the  types of policy instruments engaged.  When the federal  policy sets limits on aggregate emissions quantities, or  allows manufacturers or facilities to average performance  across states, the emission reductions accomplished by a  subset of U.S. states may reduce pressure on the  constraints posed by the federal policy, thereby freeing  facilities or manufacturers to increase emissions in other  states.  This leads to serious “emissions leakage” and a  loss of cost-effectiveness at the national level.  In  contrast, when the federal policy sets prices for emissions  or does not allow manufactures to average performance  across states, these difficulties are usually avoided.   Even in circumstances involving problematic interactions,  there may be other attractions of state-level climate  policy.  We evaluate a number of arguments that have been  made to support state-level climate policy in the presence  of federal policies, even when problematic interactions  arise.},
      url = {http://ageconsearch.umn.edu/record/93413},
      doi = {https://doi.org/10.22004/ag.econ.93413},
}