US Climate Change Policy
US Climate Change Policy

The debate surrounding global climate change has been a hot button issue for the past few years.  In most cases, the average person doesn’t know enough about the science behind this issue to make an informed decision.  The fact is that climate change will become a major issue within the next two decades and will have a host of environmental as well as economic impacts in the United States.  Climate change will play a major role in the way our economy functions as well as the way our legislators make decisions.

by Nicholas Varilone, The Green Economy Post

Cause and Effects of Climate Change.

Our climate is being affected by the emission of greenhouse gases in our atmosphere through various human industrial processes.  A greenhouse gas is a gas that traps solar radiation reflected off of the earth’s surface, not allowing excess heat to escape into space.  The majority of the harmful gases being trapped into our atmosphere are Carbon Dioxide (CO2), Nitrous Oxide (N2O) and Methane (CH4).   Without the interference of humans these gases stay in relative balance in the atmosphere.  Carbon dioxide is emitted and absorbed in the natural environment through a process known as the Carbon Cycle.

The growing supply of these gases in our atmosphere is causing extreme changes in our environment.  The polar ice caps are melting, sea-level is rising, the concentration and frequency of tropical storms are growing, the flow of rivers are changing, and certain regions are experiencing extreme rainfall while others extreme drought.  The possibility of major shortages in food production as well as access to fresh water is also a major consequence associated with climate change.  Without the reduction of these gases in our environment our planet faces serious peril in the 21st Century.

Costs of Climate change.

Most people do not realize that inaction against climate change will not only have a serious environmental impact, but an extremely viable economic impact as well.   A recent report by economist Nicholas Stern of the British government known as the Stern Review accesses the damage climate change will have on the global economy.


  1. 5% of global Gross Domestic Product per year will be lost.  This is compared to the 1% of global GDP that would be necessary to avoid the worst impacts of climate change.
  2. If no action is taken the concentration of greenhouse gas emissions could double pre-industrial levels by 2035.  This would result in a global mean temperature increase of 2 degrees C.
  3. The worst effects of climate change can be managed if greenhouse gas levels in the atmosphere can be stabilized between 450 and 550 ppm C02 equivalent.
  4. In order to stabilize global climate greenhouse gas emissions must bet cut down to more than 80% current emission levels.

This report assesses the major economic problems that will arise if no action is taken to combat climate change.  The temperature change proposed in this review is equivalent to the temperature change from the last ice age to today!  Such a radical temperature change would no doubt result in many economic problems.  We may experience mass migrations from drought ridden civilizations, as well as having our coastlines swallowed by the ocean.  The time to act is now, there can be no delay.

What is Being Done?  Barriers to a Solution.

Fortunately, progress is being made in this arena.  In late 2009, the United Nations Climate Change Conference or Copenhagen Summit was held.  This summit was a major step forward and brought the issue of climate change to the attention of world leaders from countries such as the United States, China, Brazil, and South Africa.  On December 18th, 2009 the Copenhagen Accord was ratified.  This document recognized that serious action should be taken to keep global mean temperatures from rising by more than 2 degrees C.

In order to actively combat climate change strong direct policy action must be taken now.  Policy must be designed to not only achieve its goal on an environmental level, but also must be economically viable.  The reliance on dirty non-renewable energy sources such as oil and coal must be averted.  As long as there is a market for fossil fuels, no reduction in greenhouse gas emissions will be achieved.

This should awaken legislators to realize that action combating climate change can be a boost to economic growth and not a deterrent.    Already in the United States we are seeing an explosion in the clean and renewable energy sectors.  New alternative energy technologies are becoming more efficient, affordable, and easier to access.  This stimulus to the economy is due in part to legislation designed to promote growth in these sectors.  The 48C: Advanced Energy Manufacturing Tax Credit was written into law by the Obama administration and will provide $2.3 billion in tax incentives for the manufacture of renewable energy technologies.

Such a dynamic problem as climate change is bound to have barriers toward a solution.  The most important barriers toward a solution are as follows:

  • Climate Change is Global- The fact that climate change transcends all borders makes it one of the most difficult problems to solve in human history.  Current legislation designed to buy and trade permits to emit greenhouse gases are not solving the problem.  By reducing emissions in one sector then selling permits to pollute in a different sector is redistributing the problem not solving it.   Also without an international governing body documents such as the Copenhagen Accord can never be legally binding.  This problem needs to be dealt with through a legally binding international framework and an understanding of long-term goals.
  • Belief in the Science- The fact that this is a relatively new problem discourages acceptance of this problem’s existence.  Scientific data in this area goes back only 40 or 50 years.  Without concrete scientific data on the amount of pollution created and if this will have a serious impact on the general public’s way of life, no resolution will be reached. A recent poll conducted by the Washington Post showed that only about 70% of Americans believe that climate change actually exists!

  • Economic Growth- From a cost-benefit standpoint most people believe that the investment in legislation, research, technology, and policy implementation to combat this problem will be much too costly.  They believe the cost is too high to risk on impacts of a problem that cannot be explained in the short run.

There is no doubt that Global Climate change will be a defining characteristic of the way the global economy will be moving in the 21st century.   While progress is being made, many obstacles stand in the way of such a dynamic problem.  As our society moves forward we must invest in the R&D, technologies, and policies that will drive our civilization into a much brighter tomorrow.

© 2010, Nicholas Varilone. All rights reserved. Do not republish.

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Author: Nicholas Varilone (6 Articles)

I am a graduate of Michigan State University with a Bachelor's of Arts in Economics. I am currently pursuing a specialization in Environmental and Natural Resource Economics and will be applying to the graduate program in Environmental Economics at Michigan State University. I am an avid outdoorsman and conservationist. I am mostly interested in studying the impact we are having on global climate change. I have extensive knowledge in cost benefit analysis of government environmental programs. I am a member of MSU's student sustainability organization as well as the MSU chapter of the Sierra Club's Beyond Coal Campaign. Email: On Facebook.

  • Nick Palmer

    Nicholas wrote “Current legislation designed to buy and trade permits to emit greenhouse gases are not solving the problem. By reducing emissions in one sector then selling permits to pollute in a different sector is redistributing the problem not solving it.”

    The whole point about cap and trade is that, once established, the available “tonnage of CO2” is reduced year on year. The reduction in “supply” should lead to increasing prices for carbon thus rendering those activities that generate excess greenhouse gases steadily more expensive, whilst those who choose earlier on to go green will find their cost base steadily reducing – they become more profitable. If they go carbon neutral, they actually receive an income by selling their unused greenhouse gas permits to their “dirtier” competitors, who will have to wise up fast or go out of business.

    Nick Palmer
    “Sustainability and stuff according to Nick Palmer”

    • Nicholas Varilone

      Nick: I agree with you that a cap and trade system would make emitting carbon more costly, all while reducing costs for the greener firms. However as to the extent that this system will raise the costs for the dirty firms has yet to be seen. Current polluting industries that trade permits like these are still in operation and still making enormous profits. In my opinion if these firms have their costs raised for emitting carbon, they will find ways to cut costs in other ways. This will have a few significant drawbacks. Firstly, we may see a degradation in product quality from these cost cutting firms. Secondly, if the price on carbon does not significantly raise costs for polluting firms there will be little or no incentive to develop new cleaner technologies. Lastly, even if cap and trade systems make cleaner firms more profitable, the fact is that with the rate of current technology dirty firms are still more efficient. As long as they can continue to pollute without dire consequences these dirty polluters will not be driven out of the market, and the problem of emission reduction still persists.

  • Lee Diestelow

    Nick: Both a carbon tax or cap and trade system will have implementation and verification issues. I believe that a cap and trade system would let the efficiencies of the free market define and set the price for CO2 emmisions.

    Right now it seems as there is not much of a political appetite for this. Because the science is not under stood by the masses, raw emotions and not reason are setting the course of action. When I hear popular radio hosts telling us that the large snow storms in the east are proof that there is no global warming taking place, I know that we are facing an uphill battle from an educational perspective.

    • Nicholas Varilone

      Lee: I agree with you that we are facing an uphill battle from an educational perspective. The fact that the majority of the people in this country don’t even believe this is a serious problem, borders on criminal.

      You bring up an interesting point arguing for the efficiencies of a free market. Our country was founded on a free market and in this respect a cap and trade system may be a good short term solution. However when accessing such a dynamic problem such as climate change we really need to motivate our policy-makers to a more long term solution. It is in this that I have a problem with a cap and trade system. It seems to me a free market for carbon trade based on the profit maximizing firm will do only enough to maximize revenue in the short run, while completely ignoring the problem from a long term perspective.

  • Charles

    Lee Diestelow,

    Which free market are you talking about? Markets in the United States and worldwide are heavily manipulated and not really very free at all. they are set up and operated for very small group of people.I think it is a huge mistake to assume that people who are primarily profit motivated will take the lead in the area of voluntary climate change remediation. governmental directives with stiff penalties are absolutely necessary. It will be difficult to achieve because elected officials are so dependent upon donations that they are fearful of offending sources of funds for political campaigns. So the consumers will have to take matters into their own hands by moving their finances to socially responsible investment firms and other financial institutions that are proactive on social Justice and environmental issues. Ditto for where we spend our dollars. There aren’t many aspects of our current governmental system that has been corrupted to the point where they are seriously dangerous. This is an historical pattern that repeats itself where the structure collapses and some new form emerges to take place. It is usually not very pleasant because the old guard is extremely resistant losing power and privilege. But change happens whether we want it or not. The best thing to do is to be proactive and support true community development where people can learn first-hand how to be responsible for taking care of their own basic needs with an eye towards how this affects the larger society and the world. This will actually serve to reduce the burden upon government and make for a more informed and involved electorate than the current crop of sheep that we have now.

  • Andrew Ayers

    This is the biggest hoax that has ever been perpetrated on the world. The facts are that all of our current oil reserves are from a massive algal bloom which occurred when our atmosphere had more CO2 than O2. This algal bloom replaced the CO2 with O2 resulting in our current atmosphere. Therefore, if microalgae in the worlds oceans can remove approximately 20% CO2 from our atmosphere I think it can handle the small percent man is generating. Global warming my be occurring but if so, it is not the result of human generation of CO2

  • Tim Gieseke

    This issue is bigger than climate change, but how our land resources are managed for all ecoservices. We can’t expect to achieve results with macroeconomic forces, but we must rely on the ever present invisible hand of microeconomics as described in EcoCommerce 101: the emergence of an invisible hand to sustain the bio-economy.

  • Peter Schlesinger

    The statistic reported in the MAJOR CONCLUSIONS DRAWN FROM THE STERN REVIEW is incorrect, I believe. You report above that Stern concluded that “5% of global Gross Domestic Product per year will be lost. This is compared to the 1% of global GDP that would be necessary to avoid the worst impacts of climate change.” In 20 years, this brings the global economy to a halt?

    • Nicholas Varilone

      The statistics from the Stern Review are not cumulative. Stern was simply saying that 5% of GDP will be lost each year if climate change continuing to excel at its current level. This statistic is not intended to mean that an additional 5 % of global GDP will be lost each year.

  • Brad Wagner, Ph.D.

    Along with the average individual, most scientists don’t understand the science either. There are many methodological problems with climate change science. Let’s start with time. Climate change studies fit the data, which at best is only 150 years worth. The earth is 4.5 billion years old. At least get us back to the last ice age with reliable data.

    The second big issue I have is methodology. Conclusions drawn by climate changers are based on correlational methods only. CORRELATION DOES NOT PROVE CAUSALITY!!! Cause and effect is the issue. Not global warming which is now called climate change. Change can go either way, up or down, warm or cold.

    I am not a climate change scientist, but having a Ph.D. I am trained in the scientific method. I have seen no method that tells me the scientific community has a handle on this.

    Having said that. I am not anti-environment. I am pro-objective good science. Let’s figure this out without one sided funding by Al Gore to get the pololitical answer he wants. Let’s get the best answer science can provide and then evaluate those conclusions for solutions.

    I am appalled at the minute level of critical thinking in the scientific community and in the general public. There is too much at stake for this issue to be left to bad science and politicians of any kind.

  • Margaret Swedish

    While this debate goes on and on, climate is already changing in response to human GHG emissions. Watched last Friday a rebroadcast of NOW’s show on glacial melt, focused on India where the source of the Ganges River is receding at a record pace. The show ended at Glacier National Park where the glaciers on the US side will be gone by 2012. While folks complained about the wicked winter in the US, Australia was once again burning up. We who have so benefited from the industrial revolution are the ones arguing the most about the science and the economics, and so the decision to deal with our fossil fueled lifestyles gets put off again and again. We cannot get ourselves to accept that we have reached the limits of the industrial era, not only changing climate but already living beyond the biocapacity of the earth, a path that would be leading us to disaster even if the atmosphere was not warming dangerously.

    So, we will come to terms with new conditions on the planet as they manifest themselves. One of the sadder aspects of the need for ‘scientific certainty’ about climate change is that if we are waiting for experience to get people to believe the science, that experience means it is already too late to keep the old stable climate in which we humans thrived. The planet is changing, water sources are disappearing, desertification is on the rise, weather patterns are shifting, sea levels are rising…

    …and we are arguing cap-and-trade, thinking the market can figure this out.

    Doesn’t matter what people think. What matters is what is actually taking place. We are not at all prepared or preparing adequately for what’s coming.