CRS Report: 98-738 - Climate Change: Three Policy Perspectives

The many personal proclivities and professional constructs that help shape an individual's perspectives on environmental issues in general, and global climate change in particular, can be grouped into three perspectives that affect proposed policies. These perspectives, which can intertwine and overlap, are:

Each of these perspectives can be considered a "lens" through which individuals and policy communities view the issue -- a lens that provides a particular focus on the nature of the problem and for the kinds of actions to solve it.⁽¹⁴⁾ For shorthand, they might be termed the technological lens, the economic lens, and the ecological lens, respectively.

Each perspective and its associated policy approaches generally are sufficiently distinct that a dominating tendency in policy options can be discerned. As policy frameworks, these lenses incorporate terminology and methods associated with diverse academic disciplines and professions, including not only engineering, economics, and ecological sciences, but also various social sciences, jurisprudence, theology, and others. As policy frameworks, they should not be confused with any one academic discipline or profession;⁽¹⁵⁾ rather, they are perspectives on policymaking, on how to focus on a policy issue.

While the lenses can be analyzed as distinct perspectives, most of the time for most people they represent predilections rather than conscious alternatives.⁽¹⁶⁾ The lenses differ primarily in what aspects of the issue come into focus, resulting in some being magnified, others obscured, or even distorted. The appropriateness of this focusing is dependent on the characteristics of the specific issue and the orientation of the policymaker. Thus, a policymaker viewing global climate change through one lens -- say, the technological lens -- is not necessarily disregarding economic or ecological factors, although these factors tend to lie outside, and may be less discernible, than the more clear focus on technological options.

Ultimately, given the diversity of policymakers and the potential overlapping of viewpoints, any global climate policy considered may involve a mix of initiatives representing all of the perspectives. Any mix is likely to reflect mutual accommodation as much as conscious agreement that a combination of approaches better ensures progress toward mitigation goals. The purpose here is not to suggest that one lens is superior to another, but rather to articulate the differing perspectives in order to facilitate communication among different parties and interests.

Background. Viewed through the technological lens, an environmental problem is an "opportunity" for ingenuity, for a technical "fix." This technologically driven philosophy focuses on research, development, and demonstration of technologies that ameliorate or eliminate the problem. Many uncertainties can be ignored if technology is available to render them irrelevant (a presumption underlying the "pollution prevention" concept, for example). From this perspective, environmental policy entails the development and commercialization of new technologies; Government's role can include basic research, technical support, financial subsidies, economic mechanisms, or the imposition of requirements or standards that stimulate technological development and that create markets for such technologies.

The relationship between environmental protection and technological development was recognized early in the environmental debates and policymaking of the 1960s and 1970s. Particularly in the area of mobile source pollution control, standards anticipated technological development to achieve emissions reductions -- commonly called "technology-forcing." Although some in industry argued that this was not an efficient means of encouraging technology (particularly when the deadlines for compliance were short), the process undoubtedly stimulated development.

A "technology-forcing" approach to environmental policy is generally associated with pushing private sector research and development in a socially determined direction (for example, forcing the automobile industry to meet more stringent emission standards than technologically feasible at the time the standards were set). Technology-forcing requirements have also been imposed on public sector programs. For example, the Solid Waste Disposal Act was amended in 1992 to subject Department of Energy (DOE), which is responsible for generating 95 percent of the Nation's mixed waste,⁽¹⁷⁾ to penalties for violating the Act's requirements with respect to handling and disposing of such waste. Because there was no treatment technology available at the time, DOE was required to submit a plan to develop such treatment capacities and technologies to treat all DOE mixed wastes by 1995 (sec. 3021(b)). Failure to comply was subject to penalties against DOE by EPA.

Regulatory mandates can directly stimulate the commercialization of technology by creating market opportunities. These mandates can be performance-based (meet an emissions level), or technology-based (specify the performance of the technology used). For example, California and four other states mandate that ten percent of the cars sold in those states in 2003 have zero emissions at the tailpipe; this requirement currently can only be met by electric cars. The degree to which these mandates have forced technologies has depended on the perceived seriousness of problems (resulting in accelerated time frames for development, and in very high levels of required performance), the ease of developing the needed technology, and the impact of anticipated costs on consumers.

Along with the use of a regulatory approach to forcing technology, the federal government has also taken an active role in assisting private industry in developing pollution control technology. Some environmentally important industries did not have strong research and development sectors in the late 1960s and 1970s, or did not have ones that would easily be redirected toward pollution control. This led to governmentally directed research and developmental efforts toward pollution control technology. For example, the EPA spent approximately $2 billion supporting development of a feasible flue gas desulfurization (FGD) device for electric utility use to control sulfur oxides. At that time (late 1960s), the utility industry had no central research effort (the Electric Power Research Institute (EPRI) was not started until 1972), and individual utilities devoted their engineering efforts to improving mechanical efficiency of generation, not the chemical engineering necessary for desulfurization. Many utilities also were opposed to adding a chemical process on their plants, preferring other control techniques, such as tall stacks and low sulfur coal. The success of the Government's efforts is indicated by the fact that the FGD device is now the performance and reliability standard by which new, emerging control devices are measured.

The technological lens reflects a traditional American "can-do" faith in technology, and in the country's ability to find a "technology-fix" to meet the needs of most problems. Such an approach attempts to increase the effectiveness of technology so that social problems can be solved at little or no additional cost. Consumers' desires and needs are taken as a given. The technological response is an effort to achieve an acceptable level of environmental protection without restricting the choices available to those consumers. For example, consumers want to drive. Viewed through the technological lens, policymakers see their role as making that activity less environmentally harmful at minimal cost to consumers, not as restricting that desire or even necessarily as offering alternatives to driving such as mass transit. Efforts to diminish consumer use of the automobile would be seen as a last resort. The technological lens provides a view of the economy in which technology permits consumers to continue their preferred behaviors while concomitantly achieving environmental goals. It is not necessary for consumers to change their behavior to adjust to the "new reality" of an environmental problem.

Application to Global Climate Change. Viewed through the technological lens, global climate change is seen as a problem requiring a reorientation of the energy sector from carbon-based fossil fuels to a more "environmentally friendly" energy system based on renewables and conservation. As stated by Worldwatch Institute:

The end of the fossil fuel age is now in sight. As the world lurches from one energy crisis to another, fossil fuel dependence threatens at every turn to derail the global economy or disrupt its environmental support systems. If we are to ensure a healthy and prosperous world for future generations, only a few decades remain to redirect the energy economy.⁽¹⁸⁾

This view is reflected in a speech of President Clinton on April 21, 1993: the challenge of global climate change "must be a clarion call, not for more bureaucracy or regulation or unnecessary costs, but instead for American ingenuity and creativity, to produce the best and most energy-efficient technology." The focus on technology was evident in the Administration's 1993 Climate Change Action Plan:

These [long-term] policies must address technologies of energy supply and use, and condition markets for the long-term transition away from activities, fuels, and technologies that generate large emissions of greenhouse gases.

The policies contained in the Action Plan are directed primarily at creating effective markets for investments in existing or nearly commercially available technology that reduce greenhouse gas emissions. The core of a long term strategy must ensure that a constant stream of improved technology is available and that market conditions are favorable to their adoption. The Action Plan is likely to stimulate a modest acceleration in technological development.... Such gains will lay the foundation for the development of technologies that could contribute to significant reductions in greenhouse gas emissions in both the United States and abroad....

Research and development into the technologies that could contribute to greenhouse gas emission reductions will be a critical part of the long term effort.⁽¹⁹⁾

These views were reiterated in the President's 1998 $6 billion Climate Change Technology Initiative.⁽²⁰⁾ As stated by National Economic Council Chair Gene Sperling:

We think that this [Climate Change Initiative] package is a very good example of what we spoke about when we said that there were win-win opportunities for positive incentives that would clearly show how we can address the issue of climate change and strengthen our economy at the same time.⁽²¹⁾

Looking through the technological lens, policymakers may see technological development as cost-effective, thus improving the economy, not penalizing it. This "win-win" perspective appears clearly in the Administration's 1997 Climate Action Report, submitted in accordance with the United Nations Framework Convention on Climate Change.⁽²²⁾ The Plan "combines an array of public-private partnerships to stimulate the deployment of existing energy-efficient technologies and accelerate the introduction of innovative technologies. The goal of these programs is to cut CO₂ emissions, while enhancing productivity domestically and U.S. competitiveness aboard."⁽²³⁾ The cost of a technological approach to the climate change issue appears to net out to zero, or even to save money, depending on how the benefits from increased efficiency are estimated.

The technological lens tends to focus cost-benefit analysis on a "bottom-up" methodology that evaluates the relative costs of projected compliance techniques. As summarized by National Academy of Sciences, "technological costing develops estimates on the basis of a variety of assumptions about the technical aspects, together with estimates -- often no more than guesses -- of the costs of implementing the required technology."⁽²⁴⁾ Assumptions are technological, in terms of technological performance; economic, in terms of cost-effectiveness; and behavioral, in terms of penetration rates.

In 1991, the Congressional Office of Technology Assessment (OTA) conducted a "bottom-up" analysis using two CO₂ control scenarios: (1) a moderate scenario focused on available technical options that are cost-effective on a life-cycle basis and seen as presenting no massive problems in terms of market penetration; and (2) a tough scenario focused on the best-available technical options with less concern about difficulties in market penetration. OTA estimated the moderate scenario would reduce a projected 50% increase in CO₂ emissions from 1987 to 2015 to about 22%. In contrast, OTA estimated that the tough scenario would reduce CO₂ emissions to about half their projected 2015 levels, or 29 percent below their 1987 levels in the year 2015.

OTA estimated that the moderate scenario is achievable at a net savings to the economy; overall fuel savings (such as oil, assumed in the year 2015 to cost about $50 a barrel) would exceed annual operating costs of the control measures. With cost estimates for the tough scenario reflecting more uncertainty about the annualized capital and operating costs of proposed control measures,⁽²⁵⁾ OTA estimated a range for the tough scenario from a net savings of $22 billion to a net cost of $150 billion annually in the year 2015.

DOE's five National Laboratories -- Oak Ridge, Lawrence Berkeley, Argonne, National Renewable Energy, and Pacific Northwest -- conducted a more recent effort to estimate the benefits of a technological approach for reducing carbon emission.⁽²⁶⁾ Called the "five-lab study," the labs analyzed scenarios for technologies to reduce carbon emissions in a cost-effective manner (see table 1). In discussing their results, the National Laboratories concluded: "In short, while there will surely be winners and losers for these energy-efficiency and low-carbon scenarios, our analysis shows that their net economic costs -- under a range of assumptions and alternative methods of costs analysis -- will be near or below zero."⁽²⁷⁾

Such a conclusion immediately raises the question: "If technological fixes such as enhanced energy efficiency could actually save money, why aren't people doing it now?" One possible answer is that the projections are wrong: the technological fixes are mirages, and the market has correctly ignored them. An alternative answer, the one focused on by the technology lens, is that widespread commercialization of these technologies is blocked by technological, economic, or institutional barriers. For example, a barrier might be that the initial cost of an energy efficient appliance is higher than a lower efficiency alternative, even though the lifetime cost is less; this can be a barrier to a purchaser who is not aware of the comparative life time costs and/or who cannot afford the upfront cost despite the long-term savings. An activist viewing the problem through the technology lens would look to methods for overcoming that barrier, such as providing information on lifetime costs and/or financial help.

Scenario	Direct Costs (billion 1995$)	Energy Savings (billion 1995$)	Carbon Savings (MtC)
Efficiency Case	$25-$50	$40-$50	100-125
High Efficiency/ Low-Carbon Case	$50-$90	$70-$90	310-390

Such proponents tend to look favorably on governmental assistance in overcoming such barriers. This assistance can include public sector research, development, and demonstration efforts; incentives to private enterprise through direct funding, beneficial tax treatment for research expenditures, and cost-sharing programs to help overcome technical barriers and to improve the conditions for commercialization; governmental subsidies to technology; indirect incentives that make existing technologies less attractive than new ones (such as a carbon tax); regulatory interventions that create markets for new technologies; and regulations to address institutional and market barriers, such as energy efficiency labeling requirements.

The technology lens focuses attention on two basic issues: what drives technological development, and what barriers impede it. From this perspective, government can help stimulate the former and help remove the latter. For those who envision technological fixes that can achieve environmental goals with minimal economic costs, governmental intervention may be a necessary antidote to market failures and unnecessary barriers. But even for those who would rely primarily on markets and minimize the role of government, the technological perspective is considered optimistic, dynamic, and oriented toward the future.

14. ^(back) No further action on global climate change, or setting a policy of no federal government role are options, as well.

15. ^(back) Hence, the economic lens should not be confused with the academic discipline of economics, nor the ecological lens with ecological science. The frameworks are broader than any one discipline, incorporating a range of policy-relevant perspectives, depending on the personal experiences and knowledge of the policymaker.

16. ^(back) See Marco Janssen and Bert de Vries, "The Battle of Perspectives: A Multi-Agent Model with Adaptive Responses to Climate Change," Ecological Economics 26 (1998), 43-65.

17. ^(back) Mixed waste consists of waste that qualifies as both radioactive (low-level) and hazardous. This means that the radioactive material is subject to the Atomic Energy Act and the hazardous material is subject to the Resource Conservation and Recovery Act (RCRA).

18. ^(back) Christopher Flavin and Nicholas Lenssen, Beyond the Petroleum Age: Designing a Solar Economy (Washington D.C.: Worldwatch Institute, December 1990), p. 5.

19. ^(back) William J. Clinton and Albert Gore, Jr., The Climate Change Action Plan (October 1993), p. 29.

21. ^(back) As reported in Daily Environment Report, "Administration Announces $6.3 Billion Plan of Spending, Tax Credits to Curb Emissions," February 2, 1998, p. AA-1.

22. ^(back) Department of State, Climate Action Report: 1997 Submission of the United States of America Under the United Nations Framework Convention on Climate Change, Department of State, July 1997.

24. ^(back) National Academy of Sciences, Policy Implications of Greenhouse Warming (Washington, D.C.: National Academy Press, 1991), p. 48.

25. ^(back)OTA estimated the annualized costs of the tough scenario in a range of $350-$570 billion annually. See Congressional Office of Technology Assessment, Changing by Degrees (Washington D.C.: U.S. Govt. Print. Off., 1991), p. 321.

26. ^(back) Interlaboratory Working Group on Energy-Efficient and Low-Carbon Technologies, Scenarios of U.S. Carbon Reductions: Potential Impacts of Energy-Efficient and Low-Carbon Technologies by 2010 and Beyond, Prepared for the Department of Energy, 1997.

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