Policy Workshop Summary

Designing Durable and Ambitious Climate Policy in the United States December 2015

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This White Paper was prepared by the Governance, Environment and Markets Initiative at Yale University’s School of Forestry and Environmental Studies, in partnership with the Rockefeller Family Fund. For questions or comments, please contact: Matto Mildenberger (lead author), Assistant Professor of Political Science, University of California Santa Barbara: mildenberger@polsci.ucsb.edu; Heidi Binko, Associate Director of Special Climate Initiatives, Rockefeller Family Fund: hbinko@rffund.org; or Benjamin Cashore, Professor of Environmental Governance and Political Science, School of Forestry and Environmental Studies, Yale University: benjamin.cashore@yale.edu.

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Executive Summary

This White Paper summarizes findings from a climate policy workshop held at Yale University in February 2015. The workshop brought 15 of the country’s top policy scholars together with 15 innovative climate practitioners to identify promising new strategies for enacting ambitious climate policies in the United States. The workshop was convened in response to growing frustration with the slow pace and modest scale of US climate reforms. In an effort to brainstorm ways to break the climate policy logjam, the workshop brought academic thinking about policy change into dialog with diverse, on-the-ground experiences of leading climate practitioners. Overall, workshop participants embraced the principle of designing climate policies that can reshape climate politics. Policy designers always consider the current politically feasibility of policy options. Yet, policy advocates should also consider how climate policy designs change the future feasibility of climate reforms. For instance, when properly designed, policies can redistribute resources away from opponents and create new pro-reform actors. These policy impacts can, in turn, increase the durability of reforms or facilitate greater future influence by climate advocates. The White Paper elaborates this principle in two parts. Part I draws from academic scholarship on policy change. It highlights the importance of evaluating climate policies based on their political durability and their ability to generate new political supporters over time. Part II summarizes a lively workshop discussion that debated how best to achieve this policy durability and support expansion. Key strategies discussed included:

• Focusing on short-term policies that broaden supportive coalitions and weaken opposing coalitions, even if they are inefficient in the short-term

• Building a diverse climate movement • Using policy revenues to mobilize new and existing supporters • Coordinating climate advocacy strategies across federal, state and local levels

Getting the policy right is only half the challenge. Every policy proposal must also get the politics right. To get the politics of climate policy right, advocates and scholars will need to collaboratively address two issues. First, we must study how climate policy design shapes what is politically possible today. Second, we must consider how policy design reshapes what will become politically possible in the future.

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Table of Contents

INTRODUCTION ................................................................................................. 5

WHAT ACADEMIC THEORIES OF POLICY CHANGE TELL US ABOUT CLIMATE POLICY DESIGN .... 6

THINKING ACROSS TIME ........................................................................................... 6

THE POLITICS OF POLICY DESIGN .................................................................................. 7

STRATEGIES FOR RESHAPING THE POLITICS OF US CLIMATE POLICY ............................... 10

TARGETED EARLY ACTION ........................................................................................ 10

INVESTING IN A CLIMATE MOVEMENT .............................................................................. 11

USING REVENUES TO REDUCE THE POLITICAL SALIENCE OF POLICY COSTS ........................................... 12

COORDINATING STRATEGIES ACROSS FEDERAL AND STATE LEVELS .................................................. 14

CONCLUSION ................................................................................................... 16

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Introduction More than twenty-five years after climate change emerged on the US policy agenda, environmental advocates are increasingly frustrated with the pace and scale of federal climate policy. While a federal climate reform bill passed the House of Representatives in 2009, this reform stalled in the US Senate. Workshop participants pointed to a number of factors that help explain limited federal climate policymaking: institutional barriers, such as the sixty Senate votes needed to “filibuster proof” climate legislation; the absence of a strong climate movement to counteract mobilized reform opposition; and a decline in congressional climate leadership. More recently, climate advocates have focused on supporting executive climate regulations through the Clean Air Act. While this effort has resulted in some success, it still faces serious political obstacles. A broad coalition of economic stakeholders and state governments oppose the EPA’s regulations. These regulations also remain subject to litigation for potentially overstepping federal authority. Finally, even if upheld, the EPA’s efforts are insufficient to mitigate the climate threat without companion legislative action. Ultimately, the long-term durability and effectiveness of executive-branch climate policies remains unclear, especially under future Republican presidential leadership. How can advocates clear this legislative logjam? Can a climate movement emerge to counter anti-reform lobbies? This White Paper sheds light on these questions. It identifies key strategies that emerged from conversations at a policy workshop held at Yale University in February 2015. The workshop brought 15 of the country’s top policy scholars together with 15 innovative climate practitioners. The workshop addressed two key questions. What strategies and policy designs can ensure the durability of climate policy reforms? And what strategies and policy options can actively broaden coalitions of support for ambitious climate policymaking over time? This White Paper summarizes the workshop discussions. Part I highlights key findings from an academic literature on policy change to help inform climate advocacy efforts. Part II summarizes a lively workshop discussion that debated how to act on this scholarly advice.

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PART I What Academic Theories of Policy Change Tell Us About Climate Policy Design In many respects, climate change is an extraordinary policy challenge, what policy scholars at the workshop described as a “super wicked” problem (see box). But, climate change is also very similar to other social policy problems. Addressing the climate threat will involve imposing costs on some and distributing benefits to others. This will generate political conflict between economic winners and losers. Diverse political coalitions have and will emerge to represent different interests in an effort to gain electoral or political advantages. Consequently, strategies to legislate climate policy should draw from advocates’ experiences with policy reforms in other issue domains, from tax policy to healthcare.

Thinking across time Managing climate change’s economic and social threat is not a one-shot effort. Responding to the climate crisis will involve coordinated efforts to expand and adjust climate policies over multiple decades. Even if climate advocates pass a comprehensive climate-reform bill tomorrow, this would be insufficient to fully mitigate all climate risks. Instead, climate reform strategies need to plan for the short-term and the long-term.

CLIMATE CHANGE AS A ‘SUPERWICKED’ PROBLEM

Policy scholars at the workshop referred to climate change as a “super wicked” problem, differentiating climate change from other social policy challenges. First, time is running out to manage the climate crisis. If advocates are unable to assemble a winning policy coalition today, the scope of future climate reforms will have to expand. It may be more difficult to assemble a winning policy coalition for these more costly future reforms. Second, the same people who cause the climate problem are also the communities who have to negotiate a solution. For example, the public will be simultaneously impacted by unmitigated climate change and climate mitigation policies. Third, many decision-makers face an incentive to defer climate policy decisions into the future. Acting to mitigate climate risks involves short-term cost imposition on political constituencies for benefits that will only accrue to future political leaders. Fourth and relatedly, individuals tend to discount future harms. See Kelly Levin, Benjamin Cashore, Steven Bernstein and Graeme Auld. 2012. “Overcoming the tragedy of super wicked problems: constraining our future selves to ameliorate global climate change.” Policy Sciences 45(2): 123-152.

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In the short-term, advocates will need to build enactment coalitions: groups of political and economic stakeholders mobilized in support for specific climate reform proposals. However, passing an initial reform package is a necessary but insufficient step in delivering comprehensive climate policies. Advocates must also protect their policy wins against retrenchment efforts by policy opponents. Then, they must leverage these policy wins into support for increasingly ambitious future reforms.

As a result, choices that advocates make today can have far-reaching implications on long-term US climate outcomes. Existing policies can shape the types of actors who contest future rounds of climate policymaking, and the relative resources that these actors will bring to these future conflicts. It is not always obvious, in advance, how short-term policy decisions will shape long-term policy outcomes. The easiest policies to enact in the short-term may not be the easiest to expand or the most durable. Identifying the short-term climate policies that most empower climate advocates over time requires a focus on the politics of policy design. As one policy scholar argued during the workshop: “instead of getting policy right, we need to focus on policy as a tool for changing politics.” The politics of policy design While we have very sophisticated models of climate change impacts, models of climate politics remain underdeveloped. A fragmented understanding of climate politics constrains climate advocacy efforts. Too often, climate policies are evaluated using a narrow set of economic criterion. These evaluations focus on policy enactment and ignore the importance of thinking about climate politics over time. For instance, many economists focus their attention on the efficiency of

HOW THE PRIVATE US HEALTHCARE SYSTEM EMERGED

Policy scholars emphasize that reform sequence and timing are important factors for policy change. For instance, early US health benefits focused on supporting the elderly and poor. This limited starting point allowed the US medical community and insurance companies to reinforce their long-term control over a private US healthcare system. By contrast, other countries’ health benefit programs initially targeted the working class. This launched a dynamic that diminished private insurers’ influence and expanded the scope of public healthcare over time. For more on how small policy decisions shaped the long-term trajectory healthcare policy, see Jacob Hacker. “The historical logic of national health insurance.” Studies in American Political Development 12: Spring 1998.

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different carbon pricing policies. However, choosing to reduce carbon emissions where it is cheapest may create a plateau in climate policy ambition over time. Many of the cheapest carbon pollution reduction opportunities exist abroad or in niche sectors of the economy. As a result, climate policies designed with short-term efficiency in mind may not immediately impose costs on the largest carbon-polluting companies. These companies are also the most significant climate policy opponents. Using an efficiency-centered approach, future climate advocates may still face opposition from the same anti-reform coalitions that block reforms today. In other words, a ton of carbon pollution mitigated in one sector of the economy may not be politically equivalent to a ton of carbon pollution mitigated in a different sector or different country. Instead, decisions about who bears the costs and receives the benefits of climate policy shapes policy advocates’ resources over time. Consequently, we need to expand our repertoire of policy evaluation tools, examining reforms’ political implications in addition to their economic implications. Different policy and institutional designs can “unlock” different policy trajectories over time. Two evaluation criteria are important: policy durability and policy expansion.

• Policy durability. Does a policy’s design contain a logic that increases the durability of the reform over time?

• Policy expansion over time. Does a policy’s design contain a logic that will promote the ability of future policy advocates to expand climate policies, creating new policy advocates or increasing the relative resources available to existing policy advocates?

When policy design is not attentive to these political considerations, climate advocates’ ability to mitigate climate change will be constrained. For more reading on the politics of policy design, see:

• Eric Patashnik. 2008. What Happens After Major Policy Changes Are Enacted. Princeton, NJ: Princeton University Press.

• Paul Pierson. 2004. Politics in Time: History, Institutions, and Social Analysis. Princeton, NJ: Princeton University Press.

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AUSTRALIA’S CARBON PRICE REPEAL

Australia’s carbon price repeal provides an instructive lesson on ignoring the politics of policy design. After a decade of significant advocacy efforts, Australia passed a comprehensive climate reform bill in 2011. Yet, policy advocates were unable to agree on an emissions reductions timetable for the country’s cap and trade scheme. The Australian Green Party wanted to maximize the short-term ambition of the country’s climate reduction targets. However, the Australian Labor Party preferred less ambitious targets. Facing a stalemate, a decision on targets was delegated to an independent commission and deferred until year three of the reform’s implementation. As a policy bridge, legislators agreed to impose a “fixed” price on carbon pollution during this interim period, effectively creating a temporary carbon tax. At the same time, the country’s main opposition party, the Liberals, promised to repeal the carbon price when next elected. After the Liberals won back government in 2013, they delivered on this promise. In part, the repeal of Australia’s carbon price was a function of flawed policy design. Australia’s climate reforms created new economic losers but no new economic winners. Many carbon polluters simply paid the fixed carbon tax during the policy’s interim period without investing in decarbonization. Arguably, if advocates had pushed for an immediate start to the trading scheme, some companies would have booked forward-looking credit assets as profits. Policy repeal would have been more difficult, as it would have necessitated asset destruction. In other words, policy repeal would have involved new economic losers who could have mobilized to protect their interests.

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PART II Strategies for Reshaping the Politics of US Climate Policy Workshop participants offered a number of strategies to guide climate advocacy efforts in reshaping climate politics. Each strategy highlighted the choices and strategic options available to the climate community as it organizes to support climate reforms. Targeted early action When carefully designed, modest policy interventions can still promote ambitious long-term climate policymaking. Policies that create new pro-reform actors may not directly reduce carbon pollution levels in the short-term, but they can shape the outcome of future policymaking conflicts.

Small policy actions will shape long-term policy ambition when they create new actors or when they change the resources available to existing actors. For instance, when new supporters receive benefits from a policy, this enhances the policy’s durability by increasing the policy’s support coalition. During the workshop, participants pointed to such policies as net metering (see box) as small interventions that have the potential to reshape the politics of climate policy. In political settings where climate opponents dominate the political landscape, climate advocates can still advocate constituency-building policies. This may allow advocates to achieve significant policy wins even when opponents block direct efforts to reduce carbon pollution. Further, as climate policies create new actors with a stake in climate reforms, advocates must pro-actively engage them. For example, a number of workshop participants suggested that clean

SOCIAL SECURITY

Receiving Social Security benefits increases US seniors’ political participation, particularly low-income seniors who depend on Social Security for the large portion of their income. These individuals follow news about the program, and are more easily mobilized during elections to protect their benefits. In this way, the establishment of a social benefits program can promote its own durability by creating a new support constituency. For more on how Social Security mobilized senior-citizen constituencies to protect program benefits, see Andrea Campbell. “Self-interest, social security, and the distinctive participation patterns of senior citizens.’’ American Political Science Review 96:3 2002.

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energy companies have not been adequately engaged in the community’s strategic planning to date.

Investing in a diverse climate movement Workshop participants repeatedly emphasized the need for a broad-based climate movement. A diverse climate movement would ensure that legislators face active pressure to support climate reforms during policy conflict. At the same time, participants emphasized that the climate community must spend more time thinking about “who decides who is part of the climate coalition.” A number of practitioners criticized the insular nature of current efforts, suggesting that new communities have “an appetite to be engaged.” To engage new constituencies, the climate community will need to expand the climate movement’s goals. As a practitioner argued: “we need to think about infrastructure and jobs. We need to address inequities in the short-term to get to where we want to be in the long-term.” For a scholar: “We need to include equity in our problem definition of climate policy. These two things shouldn’t be competing…We should embrace social issues as part of the problem, and not look at them as a cost of negotiation.” Another scholar worried this approach could be taken too far. By expanding the goals of the climate movement too intensively, she worried that our ability to mitigate the climate threat might be weakened. In this sense, we can’t load onto climate policy “the need to rebuild every economy in America. We should have done that 40 years ago.” Deciding who should be part of the climate coalition has major strategic implications. One scholar questioned: “Is it about mapping climate onto the existing Democratic coalition? Or is it about creating another coalition. If you are going to do disruptive things in society…it always starts on the far left or far right, then moves toward the mainstream. I don’t see how we get transformation on climate by starting in the middle of the road.” Echoing this concern, a

NET METERING

Net metering policies allow members of the public to sell electricity into the grid, typically at the purchase price. Many consumers take advantage of net metering laws to sell energy generated by residential solar panels. By empowering the public to become small electricity producers, net metering policies create a new group of actors with a stake in renewable energy policy. These new actors can, in turn, mobilize against efforts to retrench renewable energy laws. In Arizona, net metering customers recently organized to resist local utilities’ efforts to impose fixed costs on residential solar installations. For more on how renewable energy policy design can create new energy policy advocates, see Leah Stokes (2015). Power Politics: Renewable Energy Policy Change in US States. Available at: http://dspace.mit.edu/handle/1721.1/99079

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practitioner worried about engaging “Tea Partiers because of lack of trust and lack of shared values.” Yet, other workshop participants were more optimistic about the potential for bipartisan climate coalitions. One scholar pointed out that climate policy divides both political parties in meaningful ways. From this perspective, only a broad coalition would be capable of undermining carbon-dependent political actors simultaneously embedded within both major parties. Several participants pointed to the Virginia Coastal Protection Act as a promising model for how to use revenue to build new political coalitions (see box below). When building a climate movement, advocates will also need to make careful decisions about the pursuit of elite versus public-facing strategies. Until recently, funding for US climate advocacy focused on elite strategies that supported policy bargains between the leaders of environmental groups and leading economic stakeholders. Many climate advocates described their interest in building relationships with new constituencies, including faith communities and communities of color. These relationships cannot be transactional. Instead, they need to emerge from long-term relationship- and trust-building well in advance of future climate fights.

Using revenues to reduce the political salience of policy costs Carbon pricing efforts will create new revenues. Policy opponents will politicize these revenues, and frame any policy as a costly tax. Opponents will also attempt to link climate reforms with the economic struggles of many Americans. For instance, a policy scholar warned “policies that target industries already under pressure run the risk of being blamed for [unrelated] market pressures.” Congressional efforts to enact a federal emissions trading scheme in 2009 involved insider bargains between mainstream green groups and large carbon polluters. During these debates, policy revenues (in the form of free emissions allowances) were used to moderate the cost of climate policy for major industrial actors. A similar approach defined efforts to design a Senate emissions trading scheme in late 2009 and early 2010. In each case, policy revenues were directed towards demobilizing political opponents. Many of these opponents continued to fight climate reforms despite policy concessions. Anti-reform coalitions successfully increased the salience of consumer costs, undermining electoral and political incentives to support the climate reforms. Policy scholars at the workshop argued for climate policy designs that neutralize this salience. They suggested such policy options as cap and dividend schemes (see box) to undermine opponent’s capacity to frame climate reforms as anti-consumer. Including a “climate rebate” in a reform package can give the public a stronger stake in policy enactment. In other words, this approach involves the use of policy revenues to mobilize new policy supporters rather than working ineffectively to demobilize existing opponents.

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Advocates must also blunt opposition from political allies. For example, workshop participants repeatedly debated the importance of accommodating such carbon-dependent labor actors as coal miners. A senior union leader emphasized the need to think carefully about how energy transitions will impact US workers, noting that while green energy jobs outnumber fossil fuel jobs in parts of the country, these jobs are “not in the same communities…the replacement jobs in [carbon-dependent] communities cannot be service jobs.”

CAP AND DIVIDEND

A number of workshop participants felt a cap and dividend approach could moderate the salience of carbon pricing consumer costs. With this approach, the revenues from a carbon price are distributed back to all Americans as annual dividend payments. Dividends make policy benefits visible and salient and give the public an incentive to join pro-reform coalitions. For more details on the politics of cap and dividend, see Michael Howard. “Cap carbon emissions and pay dividends to citizens – a strategy to unite Americans against global warming.” July 2012. http://www.scholarsstrategynetwork.org/brief/cap-carbon-emissions-and-pay-dividends-citizens-strategy-unite-americans-against-global

VIRGINIA COASTAL PROTECTION ACT

Coastal communities face serious climate risks. Adapting to rising sea levels and extreme weather events requires significant new investments in coastal infrastructure. In Virginia, a Republican legislator from Virginia Beach recently introduced the Virginia Coastal Protection Act. This Act proposed that Virginia join the Regional Greenhouse Gas Initiative (RGGI), a state-level emissions trading scheme based in the US Northeast. State revenues from RGGI would be used to fund climate adaptation projects along the coast, and economic development in carbon-intensive southwest Virginia. In this way, the revenues from climate policies would be distributed to buy-off potential opponents and expand the coalition of political supporters. For more on how revenues from climate policies can generate new types of political coalitions, see Eric Patashnik. “Why Local Adaptation Policies Can Facilitate Sustainable Progress to Mitigate Climate Change.” March 2015. http://www.scholarsstrategynetwork.org/content/why-local-adaptation-policies-can-facilitate-sustainable-progress-mitigate-climate-change - sthash.yTVKcroK.dpuf.

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Coordinating strategies across federal and state levels States are often viewed as “laboratories”, where new policies can be tested before national implementation. Yet, early hopes that state-level climate policies would spark the development of an integrated federal policy were misplaced. A patchwork of regional emissions trading schemes, including the Northeast’s Regional Greenhouse Gas Initiative and California’s Western Climate Initiative, could not force the passage of a federal emissions trading scheme. Instead, workshop participants argued that state-level actions are important to carbon pollution reduction in and of themselves. Rather than using state policy as a stepping stone towards federal policy, modest federal policies can instead be used to drive more ambitious state-level policies. Federal leverage comes in the form of policy carrots and policy sticks. For instance, one scholar described how the federal wind energy Production Tax Credit helped create new wind power actors at the state-level. These new actors now shape state-level debates over renewable energy policy expansion within states. By contrast, the Clean Power Plan creates federal pressure for local actors to confront climate risks. Local advocates can creatively exploit the Plan to support grassroots mobilization and movement-building at the state level, such as the Empower Kentucky effort launched by Kentuckians for the Commonwealth in 2015 (see box). One scholar also noted that state-level climate campaigns can create a “farm-team” of climate activists and politicians to more effectively contest federal policy.

The need to focus on local advocacy efforts was a common refrain among workshop participants. One practitioner argued “place-based, frontline, impacted communities are critical resources. They are the immediate face of climate change. They are an important part of making abstract climate issues concrete.” Another cautioned that, in her experience, “movements don’t get made around federal legislation. It would be nice to have less fine-tuning of federal policy and

EMPOWER KENTUCKY

The Clean Power Plan requires that each state produce its own implementation plan on how that state will reduce its electricity system carbon pollution. After Kentucky politicians refused to comply with begin developing an implementation plan, Kentuckians for the Commonwealth began the Empower Kentucky project in 2015. Over the course of 2016, the Kentucky-based grassroots organization will engage local communities in developing a citizen-designed plan to meet Kentucky’s Clean Power Plan goals. Empower Kentucky is a creative effort to leverage an existing elite-centered policy into a powerful citizen mobilization and engagement campaign. To read more about Empower Kentucky, see: http://kftc.org/empowerky.

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have more local policies that bring new interests to the table.” Yet another practitioner pointed out that the advocacy community needs to “focus more locally and on places like utility commissions that are less visible and do not get enough attention. These are the places where places where policies are under attack because they are working.” At the same time, another scholar cautioned that advocates should be careful not to ignore the need for simultaneous federal action. States with low carbon-intensities have fewer climate-related economic losers. These states will find it easier to act early on climate change. More carbon-intensive states may lag behind. Climate policy could then emerge precisely where it is least needed. Over time, differences in the carbon intensity of state economies may become pronounced, exacerbating the unequal economic impacts of climate policy across the US. This is an example of how the easiest short-term policies may undermine long-term efforts to develop comprehensive climate reforms. Arguably, the national scale provides the best opportunity for coalitions of pro-climate reformers to impose costs on all major carbon polluters. This includes polluters who might otherwise be protected by political allies at the state or regional levels. Advocates and scholars need to study these federal-state interactions carefully to identify the logics through which multilevel policies can support movement building. For example, such initiatives as the Clean Power Plan offer an opportunity to build local climate movements at the state level. On the other hand, if the legal defense of the Clean Power Plan becomes the climate community’s main goal, the Plan could undermine efforts to organize a diverse climate movement.

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Conclusion Workshop participants unanimously urged the climate community to make its first priority getting the politics of climate change right. To do this, the community must explore policies and advocacy strategies that nurture policy durability and movement strength over time. Early political and policy victories, even if modest in scope, can critically support future influence. Overall, we need to collaboratively identify the political strategies that expand pro-climate interests and weaken the influence of anti-climate interests over time. To accomplish this, advocates should ask new questions about the policies they support. Does a policy’s design contain a logic that increases the durability of the reform over time? Does it contain a logic that will promote future advocates’ ability to expand climate policies? Does it help create new climate policy advocates? Does it increase the resources available to existing advocates? Climate policymaking cannot be a simple function of identifying the economically efficient policy design. It must be attentive to politics. In doing so, advocates must confront real and significant differences in the interests of diverse stakeholder communities. Advocates will need to make tough choices about the coalitions and political strategies that should be prioritized. Workshop participants felt that sustained efforts to maintain productive dialog between leading scholars and policy practitioners could help support these decisions. This conversation needs to be a two-way intellectual partnership. Advocates will benefit from exposure to advances in academic understanding of policy change. At the same time, scholarship must be informed by the insights of practitioners tasked with developing and implementing policies. Working together, scholars and practitioners can help safeguard the environmental, social, and economic security of the United States from the risks of dangerous, human-caused climate change.