RFF on the Issues
Climate Change in Obama’s Second Term
In President Obama’s inaugural address, he stated that the United States will “respond to the threat of climate change” by leading efforts such as developing sustainable energy sources.
However, RFF’s Clayton Munnings and Nathan Richardson noted that, “However much climate hawks enjoyed the president’s speech . . . there was nothing concrete to reassure them climate is not once again a low priority relative to other issues. Words are welcome, but political action is what matters.” In a new post on Common Resources, they ask, “Will the president prioritize bold, smart action from EPA, or real support for legislation creating a carbon price? Maybe.”
The resiliency of the European Union’s carbon market is being questioned as carbon prices have fallen to their lowest levels ever. A vast oversupply of permits with few buyers could result in a complete collapse of the market: “Until there is a clear will to give legislative support to this market we cannot expect participants to keep believing in it.
A new RFF discussion paper by Duke University’s Richard Newell, William Pizer, and Daniel Raimi examines carbon markets, assessing challenges, lessons learned, and opportunities. They note that confidence plays an important role: “Governments cannot provide certainty where it does not fundamentally exist. Looking forward, however, authorities need to be clearer and more orderly about policy revisions and recognize the consequent impacts on market price, market participants, and future market confidence.”
In a recent article, Joseph Stiglitz, a Nobel Laureate and Columbia University professor, proposed that inequality is impeding economic growth in the United States, and cautioned, “Economic inequality leads to political inequality and a broken decisionmaking process.”
RFF hosted Stiglitz as part of its Resources 2020 Nobel Laureate lecture series, where he discussed how this economic inequality impacts environmental policy: “Environmental degradation is…especially a problem for the poor for obvious reasons – their position is more precarious, and when things go wrong…there are fewer ways to respond. So in this sense, inequality ought to be a fundamental consideration in fashioning environmental policies.” Video of his lecture is available here.