GraSPP-DP-E-08-001 and SEPP-DP-E-08-001

Addressing Global Climate Change:
Grassroots Initiatives and Technology
Diﬀusion in the U.S.

George R. Heaton, Jr.
Christopher T. Hill
Patrick Windham
May 2008

GraSPP Discussion Paper E-08-001

SEPP Discussion Paper E-08-001

GraSPP-DP-E-08-001 and SEPP-DP-E-08-001

Addressing Global Climate Change:
Grassroots Initiatives and Technology
Diffusion in the U.S.
George R. Heaton, Jr.
Christopher T. Hill
Patrick Windham

May 2008

A Report and Presentation
by Technology Policy International
George Heaton, Managing Principal
739 Commonwealth Ave.
Newton Center, MA 02459
Phone: phone 617-965-2841
Facsimile: 617-244-2505
E-mail: GRHeaton@aol.com
注：

著者の所属、連絡先はいずれも執筆当時のものです。
本稿に関するお問い合わせは、東京大学公共政策大学院寄付講座「エネルギー・地球環
境の持続性確保と公共政策」（略称 SEPP）（〒113-0033 東京都文京区本郷 7-3-1 035841-1324 sepp@pp.u-tokyo.ac.jp）までお願いします。

Addressing Global Climate Changep. iTable of Contents
Prefaceii

About the Authorsiii

1. INTRODUCTION

1

2. CONCEPTUAL FRAMEWORK

4

2.1 Framework for Technology Diffusion
2.2 A Theory of Grassroots Policy Change

3. STATE, REGIONAL AND LOCAL INITIATIVES

4
10

17

3.1 Legal Challenges to Federal Inactions
3.2 Regional Initiatives
3.3 State of New Hampshire

17
20
22

3.4 Initiatives in Cities

24

4. TECHNOLOGY DIFFUSION ACTIVITIES IN CALIFORNIA

31

4.1 Introduction
4.2 Four Sets of Actions that Promote Diffusion
4.4 What Will Happen Next?

31
35
44

5. ILLUSTRATION OF PRIVATE SECTOR INITIATIVES

46

5.1 Introduction
5.2 Engagement of Academia
5.3 Engagement of Think Tanks and Consultancies
5.4 Engagement of Business Associations

46
47
49
53

6. CONCLUDING OBSERVATIONS AND QUESTIONS

57

Addressing Global Climate Change

p. ii

Preface

In the spring of 2007, discussions between members of the SEPP Program at
Tokyo University and Technology Policy International revealed a strong
common interest and belief: the power of “bottom‐up” actions by individuals,
companies, cities, and states to address global climate change. Realizing thatsuch actions continue to be under‐recognized in both the U.S. and Japan, the
SEPP Program decided to commission a study by TPI to examine trends in the
U.S. and present its findings in Tokyo in May 2008.
This document contains the results of TPI’s investigations. It is presented in a
combined format – both as text and complementary Power Point slides – so as
to make it both an item for distribution and seminar presentation.
Although financial support was provided by Tokyo University, the views
expressed herein are solely those of the authors.

George R. Heaton, Jr.**
Newton Centre, MA
GRHeaton@aol.com

Christopher T. Hill
Washington, D.C.
Chrishll@erols.com

Patrick Windham
Atherton, CA
PatWindham@aol.com** Project Manager and Managing Principal, Technology Policy International

Addressing Global Climate Change

p. iii

About the Authors
George R. Heaton, Jr. is a member of the faculty at the Worcester Polytechnic
Institute in Massachusetts and an independent consultant in science andtechnology policy, environmental policy and law. Trained as a lawyer, Mr.
Heaton has been on the faculty of the Massachusetts Institute of Technology,
and has worked widely for public and private technical and policy
institutions in the U.S and abroad. Maintaining extensive professional andpersonal relations in Japan, Mr. Heaton was a Visiting Professor at Saitama
University in 1986‐87 and the First Foreign Scholar of the Ministry of Healthand Welfare in 1989‐90.
Christopher T. Hill is Professor of Public Policy and Technology and former
Vice Provost for Research at George Mason University in Fairfax, Virginia.
After earning three degrees in chemical engineering and practicing in thatfield at Uniroyal Corporation and Washington University in St. Louis, he has
devoted the past three decades to practice, research and teaching in scienceand technology policy, including service at MIT, the Office of Technology
Assessment, the Congressional Research Service, the National Academy ofEngineering and the RAND Critical Technologies Institute.
Patrick Windham is a consultant on science and technology policy issues and a
Lecturer in the Public Policy Program at Stanford University. From 1984 until
1997, he served as a Senior Professional Staff Member for the Subcommittee
on Science, Technology, and Space of the Committee on Commerce, Science,
and Transportation, United States Senate. He helped Senators oversee anddraft legislation for several major civilian science and technology agencies
and focused particularly on issues of science, technology, and U.S. industrial
competitiveness. Mr. Windham received an A.B. from Stanford University
and a Master of Public Policy degree from the University of California at
BerkeleyAddressing Global Climate Change

p. 1Addressing Global Climate Change:
Grassroots Initiatives and Technology
Diffusion in the U.S.
George R. Heaton, Jr.
Christopher T. Hill
Patrick Windham
Technology Policy International
Presentation to SEPP Program
Tokyo University
May 2008

1. INTRODUCTION

Although few would dispute the proposition that global climate change is themost challenging environmental problem the world faces, many – at least in the
United States – vigorously dispute what to do about it. To be sure, the debate inAmerica today is far from what it was even a few years ago, when “climate skeptics”
scoffed at both theory and evidence, and top policy makers openly disavowedinternational climate accords. As recently as January 28, 2008 President Bush’s Stateof the Union Address “reaffirmed” the US effort to work to complete a newinternational climate change agreement, and pledged to commit $2 billion to a newinternational clean energy technology fund.1 At face value, this rhetoric mightsuggest a national consensus about the urgency of the problem, the need forinternational solutions and the central role of technology in solving it.
Looking beneath the surface, however, we see major rifts in American thought
and action toward the issue of how to address global climate change. Two in

1

See http://www.whitehouse.gov/stateoftheunion/2008/initiatives/energy.html. It
should be noted, however, that the US will support a new agreement “only if it
includes commitments by every major economy and gives none a free ride,” and that
all the details of the clean energy fund remain to be worked out.

Addressing Global Climate Change

p. 2

particular are the subject of this paper: the locus of agenda-setting in public policy
and the focus of efforts to promote technological change. More specifically we areconcerned, in the first case, with policy initiatives that originate in local, state andregional efforts that are not led by (or may even be antagonistic to) Federal policy.
Second, we focus on the importance of strategies aimed at encouraging technologicaldiffusion, as opposed to innovation, as a means of attacking climate change. We
believe that these two approaches, though distinct, are nevertheless rooted in acommon paradigm: a commitment to immediate, broad-based, often small-scale orincremental actions to combat climate change that need not depend on the long-term
fruits of R&D or the vagaries of national and international political decisions. In
short, what we portray is a bottom-up, grassroots movement in two parallel realms –public policy and technological change – that is occurring in the U.S.

Outline of Presentation
A Technology Diffusion Framework
 A “Theory” of Grassroots Policy Initiatives
 Public Policy Initiatives to Address Climate Change States Cities
 California
 Private Initiatives to Address Climate Change Concluding ObservationsTechnology Policy International

www.technopoli.net

The structure of the paper is as follows. We begin conceptually, in Section 2,
by putting forth a framework to examine the genesis of public policy change in the
U.S. as well as the process of technological change in commerce.

In Section 3, attention is directed to the groundswell of regional, state andlocal initiatives that are now being mounted to combat climate change. Given theAddressing Global Climate Change

p. 3large number and fast-changing character of these initiatives, we have chosen to
analyze a small number of representative examples, without attempting to be
exhaustive. Since some of the most aggressive and important experiments are taking
place in the State of California, it is given separate treatment in Section 4.

In Section 5, the focus is shifted to initiatives in the private sector, including
academia, as well as private-public cooperation, to combat climate change, absent thelegal compulsion to do so. Overwhelmingly, these efforts focus on the diffusion ofexisting technologies.

A concluding chapter, Section 6, both recapitulates the main findings andleaves the analysis with a number of hard questions about the long-term adequacy ofgrassroots policy change and technological diffusion in a context where world-wide
action and major innovations may also be necessary.

Addressing Global Climate Change

p. 4

2. CONCEPTUAL FRAMEWORK

2.1 Framework for Consideration of Technology Diffusion

Framework for Consideration ofTechnology DiffusionTo address the challenge of global climate change effectively
requires many approaches, including: An array of appropriate incentives
 Changes in individual, organizational, and community
behaviors Development and application of innovative new “climate
friendly” technologies
 Diffusion and deployment of existing “climate-friendly”
technologies
These approaches are complements, not substitutes
We focus on the fourth approach, but keep in mind connections
to the others

Technology Policy International

www.technopoli.net

Addressing the challenges of global climate change will require actions on abroad front, both private and public. While some would seek to focus actions in only
one or a few areas, we recognize the importance of a complementary set of public
policies.

On the one hand, there can be no substitute for establishing more appropriate
economic incentives to guide the behavior of individuals, organizations andcorporations. One way or another – via a carbon tax, a cap and trade system, or user
regulation – the price of emitting carbon dioxide and other green house gases (GHGs)
must be raised to reflect the costs of the damage that they do to the environment.

Technology will play an essential role in coping with the threat ofenvironmental damage due to GHG emissions, as well as in coping with the changed
GHG price conditions that are expected to pertain in the future. Over the long term,
there is a critical need for new and more efficient technologies –breakthroughAddressing Global Climate Change

p. 5

technologies, as some call them – to use to make the radical reductions in emissions
that will be required if the world needs to limit atmospheric GHG levels to on theorder of 550 ppm or even lower. In the near term, however, more effective utilizationof existing technologies that have better GHG performance than technologies now inwidespread use can play a substantial role in reducing emissions until more radical
technologies are developed and put into practice. In this report, we focus on actions
to encourage adoption of these existing “climate-friendly” technologies throughout
the United States.

Why Does Technology Diffusion and
Deployment Matter So Much?










Given rapid changes in technology, coupled with the slow turn-over ofmany energy-consuming investments, most of the technology in use is notat the state of the art
Studies show that, in manufacturing for example, adoption of bestpractices and technologies by all firms could double productivity ofindustries without additional innovation
Limiting green-house gas emissions poses an entirely new set of
considerations and uncertainties for consumers and organizations
Consumers and organizations need help in deciding on which
technologies to use
The current climate change policy debate has tended to focus on
incentives, regulations, and R&D for new technologies, without adequate
attention to diffusion and deployment policies for existing technologies
The line between technology commercialization and technology
diffusion/deployment is not sharp in practiceTechnology Policy International

www.technopoli.net

Diffusion of existing technologies is key to near-term reduction in GHG
emissions, but it also can influence emissions over the next several decades as well.
Energy consuming investments, such as power plants and basic materials industries,
as well as commercial and residential construction, have expected useful lives ofseveral decades. If such investments that are made in the next few years do notincorporate the most energy efficient and climate-friendly technology currently
available, they will continue to impose a burden of excessive GHG emissions for
decades to come.

Addressing Global Climate Change

p. 6

In other contexts, diffusion of existing and better technologies has been shown
to offer considerable potential for organizational improvements. In one study done by
one of us (Heaton) in collaboration with the late J. Herbert Hollomon, it wasdetermined that applying better and existing technology in manufacturing firms,
equivalent to that used in leading firms in each industry, could yield an overall
productivity improvement of a factor of two or more.

However, the case of GHG-related technologies poses a new set of
considerations and uncertainties for consumers and industry. The uncertain GHG
price environment means that making major new investments may not be optimal if
the prices set on carbon and other GHGs are either lower or higher than anticipated.
Furthermore, many special interests are now making strong claims for the “greenness”
of their products and services; claims that are difficult either to support or refute. In
light of this, potential buyers of new GHG-related technologies need advice andexpertise from trusted sources, and they need encouragement to take the first steps
toward using better technologies.

In considering the role of technology in addressing climate change challenges,
many observers are biased toward basic research and long-term, high-risk technology
development programs, as compared with technology diffusion activities. In the
United States, there has long been a bias in federal science and technology policy
toward a preference for fundamental research. This reflects both an ideologicalpresumption against public policies that encourage applied research, as well as theinfluence of the academic community on research policy. That community will
generally benefit more from basic research than from technology deployment
programs.

One premise of this paper is that this bias toward basic research is misplaced
and that much can be gained from technology deployment and adoption programs.
Our premise seems widely shared, as efforts are underway in the United States atmany levels to encourage technology deployment and adoption. In the sections tofollow, we discuss a number of these kinds of efforts.

Addressing Global Climate Change

p. 7Some Barriers to Diffusion of ClimateFriendly Technologies








Real-world experience with many such technologies is limited
Consumers and investors are uncertain about: Performance and costs
 Future government requirements
 Potential legal liabilities
 Insurance coverages and costs
Consumers are biased toward minimizing initial capital
investments rather than total life-cycle costs
Commitments by vested interests to old technologies“Systems” and network externalities that make deployment
contingent on cooperative adjustments
The “not invented here” syndrome

Technology Policy International

www.technopoli.net

Students of the processes of technology deployment and diffusion have longrecognized certain systematic barriers to such activity. These barriers tend to exist
across a wide range of societal concerns, but there are some that are more particular to
the energy and climate-related concerns.

For example, while the technologies themselves are not necessarily new, theyoften appear to be quite novel to potential buyers and users. Many buyers makepurchase choices based on their own past experience as well as on the experiences ofothers whom they can observe and/or whom they trust. Climate-friendly technologies
have not spread widely so that there are not a great many “leaders” or “early
adopters” for others to emulate.

As noted above, uncertainty abounds in purchase and use decisions regarding
many climate-friendly technologies, and this uncertainty causes many potential buyers
to “wait and see” before investing in technologies and systems they don’t understand.
Purchasers and users worry that untried technologies may pose uncertain risks ofharms that might bring the wrath of injured parties down on them via product liability
law suits or via the action of regulatory bodies. In the same manner, insuranceAddressing Global Climate Change

p. 8

companies may be reluctant to provide coverages to early adopters of technology, or
may only provide coverage at very high prices.

Analysts have noted systematic biases against making energy-related
investments that cost more in the beginning (have high capital costs) while promising
lower operating costs. Typically, investors are led by market forces to try to minimize
first costs and to absorb higher operating costs later on. For energy investments,
higher operating costs usually translate into higher fuel use and cost and, thus, more
GHG emissions.

We also must note that in certain cases, GHGs are the product of large
networked systems of investments for which changes in any one part of the system
may be inhibited by the costs of coordinating or incentivizing complementary
investments in other parts of the system. So-called network externalities, which areoften thought of as positive, can also be negative if complementary assets must bepurchased to complete the picture.

Finally, there are major vested interests in key elements of the energyconsuming and GHG producing sectors that militate against entry of improved
technologies, even if they would be cost-effective for consumers and users.

Addressing Global Climate Change

p. 9Some Approaches to Overcoming
Barriers to Diffusion
Education, training, and information dissemination
 Certification of the performance of technologies
 Advertising and awareness campaigns
 Subsidies (tax incentives, grants, loan guarantees) tooffset high initial investments in better technologies
 Setting limits on legal liabilities Creating insurance markets
 Mandating adoption of specific technologies
Technology Policy International

www.technopoli.net

Identifying these barriers tends to lead relatively directly to insights into how
they might be overcome. Clearly, the sine qua non of efforts to overcome technology
diffusion barriers is education, information dissemination and training. Sophisticatedmeans of mass advertising on the one hand, and grass roots community demonstration
projects on the other can play a role in these kinds of programs.

More subtly, official or professional certification of the performance of newtechnologies can help overcome consumer reluctance, reduce somewhat the threat ofsuccessful products liability suits, and give comfort to insurance underwriters.

Public policies that help offset the high initial investment costs of some suchtechnologies can be important in overcoming barriers to their adoption. Various sortsof subsidies (grants, tax incentives, concessional loans, loan guarantees) can all be
helpful.

In some cases, legislative action has been taken to limit the potential liability
exposure of early users of new technologies. In the United States, for example, thePrice-Anderson Act, which limited the financial liability of electric utilities in case of

Addressing Global Climate Change

p. 10

malfunction, played a role in helping overcome the reluctance of these utilities toembrace nuclear power, when that technology was in its infancy.

Some states, where insurance is typically regulated in the United States, haverequired that, as a condition of selling insurance in the state, companies must offer
insurance coverage for new technologies that they might otherwise prefer to avoid.

Finally, and in the extreme case, governments have mandated adoption anddiffusion of more efficient technologies. In the United States, for example,
automotive fuel use is controlled via the so-called CAFÉ standard approach. Also,
major home appliances, such as air conditioners and refrigerators, must comply withcertain mandated energy efficiency standards if they are to be sold in the country.

2.2 A “Theory” of Grassroots Policy Change in the U.S.

A “Theory” of Grassroots Policy Change
in the United States
In the U.S., actions to address major problems
often are taken at local, state and private levels
before the Federal government acts
 This can happen even when the problem at hand isnational or even international in scope Private interests do not typically look to theFederal government to lead
 State and local governments are often called the“Laboratories of Democracy”
Technology Policy International

www.technopoli.net

The U.S. is structured, according to its Constitutional theory, as a “federal”
system, in which the nation was created through a federation among preexisting,sovereign component states. This federal system guarantees the perpetuation of boththe national government and states, and assumes different spheres of responsibility forAddressing Global Climate Change

p. 11

each. The U.S. federal system stands in contrast to “unitary” countries – such as
England, France or Japan – in which the nation-state is the theoretical source of power,
and in which the central government has the ability to reorganize the country’s
political subdivisions. Indeed, to a certain extent, the U.S. system was designed as areaction to and a means of avoiding the centralized power that could be seen in manyother countries. Thus, the “grassroots” tendency in the United States is a built-infeature that is well-recognized and cherished.

In practice, therefore, the impetus for many U.S. national policies to address
major problems actually begins with local, state and private action. And this is often
the case even when the problem at hand is national or international in scope. In short,neither private interests nor state and local governments assume that leadership will
come from the Federal government. On the contrary, it is typically assumed that
Federal action will follow experimentation in the “laboratories of democracy” at thestate and local levels.

The term “laboratories of democracy” is often used to describe the process bywhich diverse policy “experiments” are initiated at the state and local levels in the
U.S., with the most successful being adopted subsequently by the nation as a whole.
This term was coined by the Supreme Court Justice Louis Brandeis in an opinion hewrote in 1932 considering the spheres of Federal and state power.2 Brandeis was
well-known as a progressive thinker, with a belief in what is sometimes called“scientific socialism;” i.e., the view that public policy’s role is to improve social
welfare through continuous trial and evolution.

2"It is one of the happy incidents of the federal system that a single courageous state may, if its citizens
choose, serve as a laboratory; and try novel social and economic experiments without risk to the rest of
the country." New State Ice v. Liebmann (1932)

Addressing Global Climate Change

p. 12“Laboratories of Democracy”
A term coined by Justice Louis Brandeis of the U.S.
Supreme Court in 1932
 Posits an experimental or “scientific” view of
democratic policy change in which new ideas filter
up, the best being adopted by the Nation
 Permissive view of state policy initiatives
 Widely accepted by those who believe in“Federalism” and state-level power Recently subject to criticism by conservative thinkers
and policy-makers
 Often abrogated by the Bush Administration, notably
in the denial of the CA emissions control waiverTechnology Policy International

www.technopoli.net

Those who cite the “laboratories of democracy” theory today tend to have apermissive view of state policy initiatives, and are reluctant to see them wiped out by
across-the-board Federal regulation. Oddly enough, there is no consistent ideology
attached to those who make this argument: it can be seen in the positions of both thehighly conservative opponents of abortion who are attempting to abolish it at the statelevel, and the highly liberal proponents of homosexual marriage who also operate
entirely at the state political level. Odder still, recent critics have pointed out that
Brandeis’ phrase was probably much less focused on the concept of Federalism andmuch more on social improvement. Indeed, his later opinions routinely argued infavor progressive Federal policies that would override state action.3

In the context of climate change policy today, we see the proliferation of stateand local initiatives that are described subsequently as clear evidence of the health of
the “laboratories of democracy theory” in the U.S. Although the Bush
Administration is frequently on record in favor of this tendency and against Federal
domination, its stance has not been consistent. Mostly notably, in the context of
automobile emissions standards to control GHG, the Administration has recently
3“Laboratories of Democracy: Anatomy of a Metaphor,” Michael Graves, American
Enterprise Institute, http://www.aei.org/publications/pubID.12743/pub_detail.asp

Addressing Global Climate Changep. 13

refused California’s request to experiment with its own standards, denying the state
the waiver from the uniform Federal standard which is necessary to do so. (Seediscussion below).

General Context for Grassroots
Initiatives for Technology Diffusion
Under U.S. federalism, governance is shared by thestates and the Federal government Civic organization and activity is mostly local
 Federal and state tax laws encourage non-profit
volunteerism
 Economic development is largely a state
responsibility
 Standards-setting is largely a private activity
 A tradition of activism by universities and think tanks
to address major public challenges
Technology Policy International

www.technopoli.net

Combining Constitutional theory with other social and economic forces, ageneral context for grassroots initiatives that focus on technology diffusion can be
sketched out. A first point – that governance is shared among the states and theFederal government – deserves repeating, especially with the corollary that themission of economic development has traditionally been seen as a state-level function.
While economic regulation, springing from the Constitutional power to control
interstate commerce, has largely been a Federal role, functions as diverse as building
codes, the licensing of corporations, and government venture capital for new
technology have generally occurred at the state level. In the realm of technicalstandard-setting, most of the organizations that originate standards for products,
processes and systems are private rather than national, with the result that bestpractice tends to diffuse from the bottom up and across sectors, rather than from thenational level down. Civic organizations and activity, often focusing on improvements
to economic well-being, are much more local than national in scope. Such ventures
are encouraged importantly by Federal and state tax laws that both make suchAddressing Global Climate Change

p. 14

activities tax-exempt, and allow donations to them to result in a tax deduction. Lastly,
U.S. universities and other intellectual institutions routinely see addressing major
public challenges as a core aspect of their mission, and frequently function as a forum
where various sectoral actors can be united with a common purpose.

Grassroots Forces for Global Change
Technology Diffusion
Wide-spread popular frustration over Federal inaction
and delay A long history of engagement of the energy utilities(electricity and natural gas) in technical andoperational advice to customers
 Private sector needs for:
 Certainty about the investment climate
 Uniformity of regulatory controls
 Reality that “environmental stewardship” sellsTechnology Policy International

www.technopoli.net

More specifically at the moment, it has become clear that the grassroots forces
for technology diffusion to attack climate change have moved remarkably to theforefront. In the population at large, there is widespread popular frustration over
Federal inaction and delay in “doing something.” In industry, the firms that areperhaps expressing this most clearly are the energy utilities (electricity and naturalgas), which are promoting the diffusion of energy and materials savings technology,
as well as general knowledge of the issues. This is very much in line with their
historic role of conveying technical and operational advice to customers. Within theprivate sector more generally, there is a felt need for public policy to improve thecertainty of the long-term investment climate in sectors that will be most affected byclimate change, and to undertake some uniformity of regulatory controls. Lastly,
firms in all sectors – from retail foods to automobiles to cosmetics – are promoting
the reality that “environmental stewardship” sells as never before with the American
consumer.

Addressing Global Climate Change

p. 15

Typology of Grassroots Initiatives on
Climate Change Technology Diffusion
States/Regions
 Cities and Localities
 Academia
 Think Tanks
 Industry
 Industry-Environmental Partnerships
Technology Policy International

www.technopoli.net

In the discussion that follows, we present a wide range of specific examples ofgrassroots initiatives that focus on climate change and technology diffusion. Given
the extremely large – and fast-changing – number of such developments, it is notpossible to do an exhaustive survey.4 It is possible, nevertheless, by way of preamble,
to offer a

4

We have recently become aware of the new “GreenPRO” on-line data base that
includes environmental and energy conservation policy initiatives in many local andregional communities in the United States. It can be found at www.greenpolicy.us.

Addressing Global Climate Change

p. 16

typology of such initiatives. Our survey suggests that at least seven major categories
should be noted:•

State actions•

Aggregation of states into regional compacts•

Cities and other local governments•

Academic institutions•

Private think tanks•

Industry•

Industry partnerships with environmental groups.

Addressing Global Climate Change

p. 17

3. STATE, REGIONAL AND LOCAL INITIATIVES TO COMBAT CLIMATECHANGE

3.1 Legal Challenges to Federal Inaction on GHG

Legal Challenges to Federal Inaction on GHG












2004 -- CA promulgates first GHG auto emissions stds.
2005 -- 11 states adopt CA stds.
December 2005 -- CA Requests EPA waiver from national uniformity
April 2007 -- Supreme Ct. forces EPA to consider GHG action inlawsuit brought by Massachusetts (MA v. EPA)
September 2007 -- Federal district court in VT upholds VT GHG auto
emissions statuteNovember 2007 -- Federal appeals court in SanFran. orders DOT toconsider climate change in setting mileage stds. for light trucks
December 12 2007 -- Federal district court in Sacramento upholds CA
auto emissions stds.
December 17, 2007 -- Bush signs legislation for 35 mpg std. for 2020
December 19, 2007 -- EPA issues unprecedented denial of CA request
for waiver
December 20, 2007 -- Governors of CA and VT pledge to sue EPA
January 3, 2008 -- suit by CA, 15 other states, 5 environmentalorganizations, contesting denial of waiver

Technology Policy International

www.technopoli.net

The US legal system accords a remarkable degree of openness to litigants ofall types who wish to challenge the actions of the Federal government. To asignificant extent, this is due to the environmental movement, which urged the courts
as early as the 1960s – and with considerable success – to grant “standing to sue” tocitizens groups, environmental organizations, and even (on occasion) natural entities.
Although the environmental statutes enacted during the 1970s represented asignificant shift of power from the states to the Federal government, they by no means
inhibited the states’ ability to challenge Federal action in court. Law suits in the US
often represent a form of public jousting that escalates legal controversies into thehigher-profile realm of political agenda-setting and notoriety. Controversies thatmake their way to the Supreme Court take on a special significance, not only becauseof the power of the legal precedent. In addition, because the US Supreme Court isuniversally recognized as the final arbiter of questions of Constitutionality, it is able –and often quite willing -- to invalidate the actions of other branches of governmentAddressing Global Climate Change

p. 18

and thus force dramatic changes in policy.

The area of climate change has recently brought these general tendencies into
clear focus. States, localities and environmental groups, frustrated by Federal inaction,
have used the courts as a way to validate their own policy initiatives in this sphere, tocall public attention to Federal failures to address climate change, and – where
possible – to force Washington to act. By and large, they have been remarkably
successful.

Most of the important recent litigation has developed under the Clean Air Act(CAA), which regulates air pollution according to a complicated scheme first put
forward in 1970. The CAA creates entirely different regulatory systems for stationary
sources of pollution, such as factories, and mobile sources, such as automobiles. In
neither context have Federal regulators taken any action pertaining to GHG or climatechange. They have justified themselves by arguing that GHG are not pollutants
explicitly recognized by the CAA, that the science of their relationship to climatechange is uncertain, and that non-regulatory approaches are the most appropriate
policy alternative. On the other side, state and environmental groups argue that GHG
are well-recognized pollutants that should be regulated from stationary sources, andthat a separate set of emissions standards should be mandated for automobiles.

California, as has often been the case in air pollution regulation, has played theinitiating role. Indeed the CAA itself recognizes California’s unique situation, andallows EPA to grant a “waiver” for California automobile regulations that go beyond
those in the remaining states. This was clearly the process envisioned by the
California auto emissions standards promulgated in 2004. In addition, California
adopted its own unique GHG emissions reduction system, pertaining to stationary
sources. Based on California’s example, around a dozen other states have pursued
similar strategies. The resulting litigation has involved the industry, environmentalgroups, the states, cities and the Federal government in a wide range of controversies.
Thus far, the alliances of states and environmental groups have won allimportant judicial contests with the Federal government. The most dramatic victory
to date is probably the decision by the Supreme Court in the suit led by Massachusetts

Addressing Global Climate Change

p. 19

against EPA, to force it to consider GHG, especially CO2, as pollutants under the
CAA. As a result of this litigation, in which the Court repudiated both EPA’s
scientific assessments and its legal interpretations, EPA has been forced to commence
rulemaking to attack GHG emissions.

A more equivocal picture is emerging with respect to state auto emissions
regulation. Although diverse Federal courts throughout the country have upheld theauthority of the states, led by California, to undertake such regulation, EPA disagreed
with this rationale when, in December 2007, it refused California’s request for awaiver. Within two weeks, California, along with 15 states and 5 environmentalgroups, had brought suit in Federal court to challenge EPA’s determination.

While it is certainly true that the litigation during the Bush era has been acontest between environmental activism in Democratic states and the inaction of a
Republican Administration, the tension between Federal and non-Federal policy goesmuch deeper than partisan politics. The litigation that has emerged must also be seen
as part of the continuing dynamic in US environmental policy to determine at whichlevel of government the agenda is set, as well as who sets the standards by which
agendas are implemented. The history of this litigation accurately reflects thetendency for experimentation and diversity to occur at the state level, and thetendency for uniformity and large-scale action to be reflected in Federal policy.

Addressing Global Climate Change

p. 20

3.2 Regional Climate Change Initiatives

Regional Climate Change Initiatives

http://www.pewclimate.org/what_s_being_done/in_the_states/regional_initiatives.cfm

Technology Policy International

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Regional Initiatives to Combat Climate
Change in the US and Canada
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Now cover 31 states and several Canadian provinces
2001 -- New England governors’ Climate Change Action Plan: 10% GHG
reduction by 2020; includes Eastern Canada Association
2003 -- West coast governors’ Global Warming Initiative: CA, OR, WA
2004 -- Western Governors’ Association: clean and diversified energy: 30,000
MW clean energy by 2015; 20% efficiency improvement by 20202005 -- Regional Greenhouse Gas Initiative (RGGI): 7 New England states,
other observers
2006 -- Southwest Climate Change Initiative: AZ, NM
2007 -- Western Climate Initiative: 6 state members, 2 Canadian provinces;
15% GHG reduction by 20202007 -- Midwestern Regional Greenhouse Gas Reduction Accord: 6 state
members, one Canadian Province, 2 observers; inventory and cap and trade2007 -- Energy Security and Climate Stewardship Platform for the Midwest:
carbon capture and energy efficiency
Sept 10, 2008 – First national auction of CO2 allowances by New England, NY,
NJ, MD, DE

http://www.pewclimate.org/what_s_being_done/in_the_states/regional_initiatives.cfm?preview=1

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Regional initiatives to combat climate change now cover 31 states and several
Canadian provinces. As the map shows, they are concentrated in the Northeast, FarAddressing Global Climate Changep. 21West, and Upper Mid-West of the country, which are the most environmentallyprogressive regions. The initiatives were from their inception seen both as a way to
do something about the problem of global warming, and as a direct challenge to thelack of action on the part of the Federal government. Indeed, as recently as March 18,
2008, the New York state environmental commissioner, announcing the first-in-thenation auction of CO2 allowances, reiterated the rationale for the regional initiatives:“Climate change is the most significant environmental problem of our generation, andthe 10 states cannot wait for Federal action.”5

The timeline in the slide above shows the expansion of the regional initiative
concept over the last seven years. In 2001, the New England Governors agreed to acommon Climate Change Action plan, with GHG reductions of 10% by 2020. Thisaccord expanded into the Regional Greenhouse Gas Initiative. In 2003 the West
Coast Governors launched their plan, which added the Southwest states of Arizona,
New Mexico and Colorado in 2006. In 2007, the trends spread into the Midwest, withthe establishment of the Midwestern Regional Greenhouse Gas Reduction Accord.

Broadly speaking, these accords take the same approach. Most have a specific
GHG reduction target. Clean energy is promoted through various means. Carbon
inventories are being undertaken in the anticipation of an eventual cap and tradeapproach. The first example of this will occur in New York in September, 2008.

It has to be noted that, thus far, the accords do not seem to be achieving theirenvironmental goals. For example, a recent report for New England show that GHG
emissions have increased in all sectors and almost all states (Rhode Island alone
showed a drop).6 Nevertheless, these programs are very much in the public eye andhigh on the agenda of policy-makers throughout the region. They clearly represent astrong consensus to act, as well as a strong consensus over the appropriate policy
levers – namely, mandatory GHG reductions, a trading system, and energy R&D.
5

Remarks by Peter Grannis, NY Environmental Commissioner, reported by the
Associated Press, Tuesday, March 18, 2008.
6“Falling Behind: New England Must Act Now to Reduce Global Warming
Pollution,” combined authorship from The Frontier Group, the New England Climate
Coalition, and the Natural Resources Council of Maine, released March 26, 2008.

Addressing Global Climate Change

p. 22

3.3 The State of New Hampshire

State of New Hampshire Actions to
Combat Climate Change
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80% of NH Republicans in March 2007 survey urge US action tocombat climate change
164 Towns (of 234) have passed resolution urging President andCongress to establish emissions reduction programs
7 “Cool Cities” implementing mayors’ Climate Protection Agreement
March 2007 Legislative Resolution sent to Washington, urging climatechange action
2007 Renewable Energy Act -- utilities required to use 25% renewableenergy by 2025; Renewable Energy Certificates issued by ISO
Climate Change Policy Task Force just established by Governor“Model Rule” on GHG reductions and emissions trading soon to be
adopted in NH, based on New England RGGIParticipation in Eastern Climate Registry -- voluntary inventory ofindustrial facility GHG emissions

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New Hampshire is a relatively small (population 1.3 million) New Englandstate, notable for granite, snow cover, the direct democracy of Town Meetings – andfor holding the Nation’s first presidential primary election every four years. It is apolitically aware and activist state, with a reputation for independent voters who
eschew traditional party and ideological labels. Within the last few years, the issue of
global climate change has become a major concern among the New Hampshire
citizenry, and, during 2007, it has virtually exploded onto the agendas of cities andtowns, the state legislature, universities and businesses.

With a small land area, population and lack of industry, New Hampshire’s
impact on global climate change is inconsequential. But what makes it of particularinterest in this context is the breadth and fervor of the actions its public has taken tocombat global climate change, to a significant extent outside of the conventional
party-based political debate. New Hampshire is often seen as a bellwether state in
Presidential politics; this may be the case in climate policy as well.

Addressing Global Climate Change

p. 23

Although New Hampshire had long been seen as a solid Republican state,
this has changed in recent years, with Democrats now slightly outnumbering
Republicans, and “Independents” outnumbering both. It is therefore significant that
80% of the state Republicans – arguably the most “conservative” bloc – expressed
themselves, in March 2007, to be in favor of the proposition that action should betaken at the national level in the U.S. to combat climate change.

The enthusiasm for national action has carried over into New Hampshire cities
and towns in a unique way. All of New England – but especially the more rural areas– has clung for more than 300 years to the “Town Meeting” form of governance.
Perhaps the leading US example of direct democracy, Town Meetings of all citizens
are convened yearly to authorize town activities and expenditures – and to provide aforum to air whatever issues the people wish to put forward. In practice, all mannerof resolutions are offered, and debate usually goes on into the early morning hours.
Within the last two years, 164 of New Hampshire’s towns (about two-thirds of thetotal of 234) have passed resolutions urging the U.S. President and Congress toestablish GHG emissions reduction programs. Although it is of course wellrecognized that such resolutions have no legal effect, the towns have wanted to put
their voice before national policy-makers, and want it to be heard outside the realm ofpartisan politics (about three-quarters of these towns are Republican).

Though dominated by towns, New Hampshire also has a few cities (the largest
with a population of 100,000) that grew out of “mill towns” from the textile
manufacturing boom of the 19th century. Today, as textiles have been abandoned,
most cities are trying to move into technology-based sectors, in which environmental
considerations are a central strategy. Thus, seven “Cool Cities” (referring both tolowering the carbon footprint and to their allure) have signed and developed plans to
implement the US Mayors’ Climate Protection Agreement. Typically, these include
Energy Action Plans to educate the citizenry, overall targets for GHG reductions, andthe use of municipal facilities as test and demonstration sites to help educate thecitizenry.

Addressing Global Climate Change

p. 24

At the State government level, there has been a similar impetus. For example,in March, 2007, the Legislature sent a formal Resolution to Washington, to the
President, and to all State representatives, urging them to take action on climatechange. Even politicians not previously known as pro-environmental appear to haveheeded this voice. More concretely, a Renewable Energy Act was passed by theLegislature in 2007, which requires all utilities to use 25% renewable energy by 2025.
The implementation of this requirement will be made in cooperation with the ISO,
who will examine facilities and issue “Renewable Energy Certificates” to document
progress. Lastly, the Governor has just established a Climate Change Policy Task
Force, to assess the current situation in the state and the possibilities for the future.

At the regional level, New Hampshire has for some time been a member of the
New England-wide Regional Greenhouse Gas Initiative (RGGI). It has been
participating in the development of a “Model Rule” for GHG reductions andemissions trading that should soon be unveiled and adopted. Lastly, a voluntary GHG
emissions census – the Eastern Climate Registry – is just getting underway in theindustrial sector.

3.4 Initiatives in U.S. Cities

Beginning a decade or so, a number of U.S. cities began to express theirconcern for the problem of climate change. By and large, these cities are ones
characterized by a high degree of education and environmentalism, and have been
located mostly on the West Coast and in the Northeast. Since then, the movement has
spread, resulting in hundreds of climate change action plans throughout the country.
While people in these cities realize that their actions alone are of no physicalconsequence in mitigating climate change, the fact that they choose to undertake themis consistent with the American tendency to emphasize grassroots beginnings to thesolutions to large problems. Indeed, it is probably the American cities that are leading
the country in this respect.

The diversity and number of climate change initiatives in urban areas makes it
virtually impossible to survey them fully. So does their constantly changing nature.

Addressing Global Climate Changep. 25

What is attempted here instead is a focus on three examples: the U.S. Mayors
Climate Protection Agreement, which represents the highest degree of coordination todate; the climate change plan of the City of New York, which is the Nation’s largest;and the energy action plan of the City of Newton, Massachusetts, which typifies
smaller-scale activism.

U.S. Mayors Climate Protection
Agreement
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
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



Feb 16, 2005: Kyoto Protocol comes into force for 141 countries
and 141 U.S. cities
Seattle leadership
November 1, 2007: 710 signatory cities
Goals
 Strive to meet or beat Kyoto targets
 Urge Federal and state governments to accept Kyoto
 Urge national legislation, including national emissions
trading system
Typical actions
 Alternative fuel municipal fleets Clean energy for utilities
 Energy-efficient lighting
 Building retrofit and construction standards
http://www.usmayors.org/climateprotection/

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Credit for the initiative that has resulted in the U.S. Mayors Climate Protection
Agreement is usually given to the Mayor of Seattle, WA, Greg Nickles.7 The City of
Seattle has long been in the forefront of environmental consciousness, and Mayor
Nickles was able to capitalize on this by spearheading what has now become anational movement. After modest beginnings early in the decade, the mayor’s
initiative launched its most dramatic action on February 16, 2005. On this day, when
the Kyoto Protocol came into force for 141 countries, 141 U.S. cities also “signed”
the Protocol. Although it was well-recognized that cities have no standing to take any
actions in the international legal context, their mass endorsement of the climatechange regime was an important symbolic act. Its persuasiveness may be seen in the7

http://www.seattle.gov/mayor/climate/Addressing Global Climate Changep. 26

fact that by November 1, 2007, a total of 710 U.S. cities had signed the Mayors
Agreement.

The Mayors Agreement relies both on certain standard provisions that all
signatories agree to, and the possibility of widely disparate further actions. The threestandard provisions are:•

A pledge to work to meet or exceed the Kyoto targets in their own
jurisdictions (i.e. 7% GHG reduction by 2012, compared to the baseline of
1990)

•

Urging both the states and the Federal government to accept the Kyoto
Protocol

•Lobbying for national GHG emissions legislation, including a nationalemissions trading system.

Beyond this, most of the municipalities have established their own particular plans,
which typically include such actions as: alternative fuels for municipal vehicle fleets;
clean energy goals for utilities; energy-efficient lighting; building retrofit; and new,green construction standards.

Addressing Global Climate Change

p. 27

PlanNYC 2030
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April 2007 initiation; October 2007 status report; December
2009 milestones
Broad environmental vision,housing, open space, brownfields,
water, transport, energy, air quality, climate change -- 110
specific initiatives
GHG Reductions
 30% by 2017
 First building code change since 1968
 10 universities take 30% pledge
 Anti-idling technology for cabs
Climate Change Coping Inventory of at-risk areas
 Long-term strategic planning process
Policy Change
Bloomberg endorses carbon tax
Congestion toll proposal for Manhattan* http://www.nyc.gov/html/planyc2030/html/home/home.shtml

Technology Policy International

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The most comprehensive and ambitious plan of any U.S. city has probably
been mounted by New York City. The result of a fairly long planning process set inmotion by Mayor Bloomberg, “Plan NYC 2030,” was initiated in April 2007. In
October 2007, a six-month status report was released, and the first milestones ofaccomplishment are targeted for December 2009.

Plan NYC 2030 goes far beyond the mayors agreement on climate change. Its
purpose is to articulate a broad environmental vision for the City, covering issues suchas housing, access to parks, open space, transport, and air quality, as well as climatechange. Across all the component areas, one hundred ten discrete initiatives areproposed.

In the area of climate change, the plan takes three broad approaches. First,
there are various GHG reduction strategies that the City intends to pursue on its own,
which are estimated to result in a 30% decline in GHG emissions by 2017. Somerequire sweeping legal change – such as the first building code revision since 1968.
Others involve the private non-profit sector; for example, 30 universities have pledged
30% reductions in their own operations.

Addressing Global Climate Change

p. 28

A second major component of the plan is based on the realization that New
York is highly vulnerable to the global effects of climate change – particularly sealevel rise – and there is essentially nothing to be done but cope. Thus, the City is now
undertaking and inventory of those areas most at risk, and implementing a long-termplanning process to mitigate the danger.

Lastly, the Bloomberg Administration has been aggressive in recommending
policy changes, not only for itself, but also for the State of New York and the U.S.
Generally speaking, the strategies endorsed by New York rely on economic incentives.
Specifically, the Mayor speaks consistently in favor of a national carbon tax. In
addition, a proposal is on the table for congestion tolls for Manhattan. While theFederal government (that is, the U.S Department of Transportation) has been
supportive of this idea, its future is very much in doubt, as it requires authorizing
legislation at the state level, and this has not met with much enthusiasm thus far.8

The City of Newton, MA is a suburban community of about 80,000 residents,
bordering on Boston. For many years, Newton has been among the mostenvironmentally conscious cities in Massachusetts, and within the last five years hasembarked on an Energy Action Plan, which went into effect in 2005. Its goals are to
reduce GHG by 7% by 2020, over the 1998 base year, to reduce the municipal sector
GHG emissions by 20%, and to establish an Energy Office and municipal investment
fund, which will support investments in energy-saving technologies.

8

The congestion tolls initiative failed to get enough support to be considered in the
New York legislature and, as of April 7, 2008, there appears little likelihood that it
will be adopted. See: Nicholas Confessore, “$8 Traffic Fee for Manhattan Gets
Nowhere,” The New York Times, April 8, 2008.

Addressing Global Climate Change

p. 29City of Newton, MA Energy Action
Plan
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



Initiated February 2005
Goals
 Reduce energy/GHG 7% from 1998 level by 2020
 Reduce municipal sector GHG 20%
 Energy Office/Investment Fund
Strategies Purchase renewable elec.
16,100 ton GHG reduction
 Building energy efficiency 68,000 ton Energy distribution
20,450 ton
 Transportation
36,000 Reduce solid waste
1,000*http://www.ci.newton.ma.us/sunergy/EAP021005.pdf

Technology Policy International

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City of Newton, MA 2002 GHG by
SectorTechnology Policy International

www.technopoli.net

While Newton and its citizens are highly committed to the Energy Action Plan,
the problem it, and other similarly small-sized communities, face is that it is hard toaccomplish much. As shown in the attached chart, about a third of Newton’s GHG
emissions are from transportation, over which it has virtually no control. The

Addressing Global Climate Change

p. 30

residential component -- even larger at 40% -- consists largely of old housing stock,
whose energy
profile cannot change quickly. In addition, since building codes are promulgated by
the state of Massachusetts, it is hard for Newton or other communities to make much
headway. Still, Newton has made its goals very specific in terms of tons of GHG tobe reduced. Whether or not it is able to achieve them will offer a meaningful example
to other communities.

Addressing Global Climate Change

p. 31

4. TECHNOLOGY DIFFUSION ACTIVITIES IN CALIFORNIA

Comprehensive Climate Change Action:
Focus on California
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California is the largest state in the U.S. measured by population
California is one of the two or three most technology-intensive
statesCalifornia is constantly threatened by diverse climate-related
challenges that make its citizens and political leaders attentive toclimate change impacts
California often leads the nation on environmental matters

Technology Policy International

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4.1 Introduction
California is the world’s fifth largest consumer of energy.9 Today it is also aleader in reducing greenhouse gas (GHG) emissions, and home to many efforts thatuse existing technologies to help reduce these emissions. The best-known initiative
comes from the state government, the ambitious Global Warming Solutions Act of2006. But in addition to this and other important “top-down” efforts by the state
government, California also has many “bottom-up” activities by local governments,
private companies, entrepreneurs, and non-profit organizations. Together, these
efforts are using three types of existing technologies to reduce GHG emissions:energy-efficient products, low-pollution renewable energy sources, and pollutioncontrol technologies. This paper can only briefly introduce these various initiatives,
but together they show that California is beginning a huge and important experiment
in reducing GHG emissions.

9

California Energy Commission, “California Energy Commission – An Overview,”
http://www.energy.ca.gov/commission/overview.html

Addressing Global Climate Change

p. 32

4.1.1 Background: California’s Attitudes Towards the Environment and Towards
Technology

California: Why the State, Cities, andIndustry Support GHG Regulation

Major political actors in California support reducing global warming: CA voters are pro-environment and heavily Democrats (but also anti-tax)
 Many CA voters are deeply concerned about the apparent effects of global
warming: sea level rise, reduced water supply, more fires
 Long and successful tradition of CA state government action to regulate
sources of air pollution (especially auto smog)
 The state governor and other state and local leaders support GHG reduction
 CA has no coal industry, only a small oil industry, and it electric utilities
support energy efficiency actions
 Entrepreneurs and research institutions also support regulation and hope tocreate new industries; part of CA’s long search for “the next big thing”
Result: a strong political coalition in favor of regulating GHGs
However, CA’s anti-tax stance works against a carbon tax and supports hopes ofusing new technologies to reduce GHGs without greatly increasing costs

Technology Policy International

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Why has California begun such an ambitious effort to reduce GHG emissions?
The main reason is that a strong political coalition wants to protect the environment.
At the same time, important political, cultural, and business factors lead California toemphasize technological solutions as the most acceptable way to meet theseenvironmental goals.

Addressing Global Climate Change

p. 33

4.1.2 A Strong Political Coalition in Favor of Environmental Protection
Politically, Californians in general are pro-environment.10 The proenvironment attitude comes not only from living in a beautiful state but also from a
deep sense of vulnerability. Nature can be threatening in California, causing water
shortages, fires, landslides, earthquakes, eroding coastlines, and invasive species. In
addition, we have human-made pollution. Climate change seems like a realpossibility to many Californians, because they have seen nature’s fury andenvironmental degradation.

Moreover, specific groups and political actors have helped to build a strong
political coalition in favor of dealing with global warming. Many Californians are
Democrats who are generally pro-environment and also comfortable with government
activism. Democrats control the state legislature. At the same time, California now
has a moderate, pro-environment Republican governor, Arnold Schwarzenegger.

In addition, major California industries do not oppose environmental
protection. California has no coal industry, only a small remaining oil industry, utility
companies that are comfortable with energy efficiency and renewable energy, andmany manufacturing and service companies that see energy efficiency as a way to
reduce costs.

Finally, the pro-environment coalition in California includes many
entrepreneurs and research institutions, which not only care about the environment but
also hope to create new companies and jobs from “clean-tech” (“clean technology,”
also known as “green tech”). Californians in Silicon Valley and elsewhere see abusiness opportunity in clean-tech – and in government regulations that encourage
people to adopt clean-tech technologies (both existing technologies and possible
future ones). Like Japan, California hopes to be a world leader in this business. One
might almost say that clean-tech is the latest in California’s long history of “goldrushes,” where entrepreneurs and investors rush into businesses that they hope will10

For one perspective on the attitudes of Californians regarding environmental policy,
see: Mark Baldassare, et al, Californians & the environment, Public Policy Institute ofCalifornia, July 2007, http://www.ppic.org/content/pubs/survey/S_707MBS.pdf

Addressing Global Climate Change

p. 34

lead to huge profits. This hope may be exaggerated, but of course California does
indeed have superb capabilities in research, technology, and entrepreneurship. Cleantech in fact could be California’s next great industry.

4.1.3 Political, Cultural, and Business Factors That Emphasize Technological
Solutions to Global Warming

At the same time, however, Californians have political, cultural, and businessreasons to emphasize technological solutions to global warming, instead of changes inlife styles.

Politically, Californians do not like higher taxes or significantly higher
consumer prices. Environmental protection is fine so long as it does not cost too
much. So, for example, proposals for higher gasoline taxes or expensive newinvestments in public transportation generally are unpopular. In this politicalenvironment, people like the idea that technologies – both existing ones and futureones – will “save the planet” without imposing big costs on citizens.

These political attitudes are related to a California culture that makes
technology a particularly attractive tool for reducing GHG emissions. That culture
has two important features. First, many Californians are highly individualistic and do
not want to change their “life styles.” For example, Californians like their cars and do
not want to give them up, and many residents like living in suburbs. So proposals thatwould change how people live or change land-use patterns often encounter cultural –and political – resistance. In this culture, it is easier to persuade people to use
technologies that improve cars than to persuade them to give up their cars. Second,
many Californians are comfortable with new technologies and willing to try them.
One example is the large number of Toyota Priuses sold in the state.

Finally, California companies eagerly tell citizens that new products based on
advanced technology can save the planet. For example, California has an increasing
number of companies that manufacture and install solar panels. Tesla Motors, a startup company in Northern California, is manufacturing an electric sports car.

Addressing Global Climate Change

p. 35

4.1.4 The Resulting Bias Towards Technological Solutions

In summary, California has a powerful political coalition in favor of actions to
reduce GHG emissions, and it has powerful political, cultural, and business reasons to
use technology – as opposed to changes in life styles – as the primary policy
instrument for reducing those emissions. California’s current policies regarding
technology diffusion reflect this underlying attitude.

4.2 Four Sets of Actions That Promote Technology Diffusion

Four Sets of Actions in California: thePublic Sector


Major CA state government global warming laws:
 Assembly Bill (AB) 1493 passed in 2002 law requires the
Air Resources Board to limit GHG emissions from motor
vehicles (necessary Federal EPA waiver was recently denied
and the decision appealed—see below)
 AB 1007--2005 law requiring state plan to increase use ofalternative fuels
 AB 32 --Global Warming Solutions Act of 2006, requires
reduction of CA GHG emissions to 1990 levels by 2020
• Based on Governor Schwarzenegger’s 2005
Executive Order S-3-05• May result in a major cap-and-trade system for thestate;
Examples of “bottom-up” initiatives in cities:
 San Jose: Mayor’s initiative to cut GGH emissions, recycle
water, and create 25,000 new clean-tech jobs
 San Francisco: all city buses converted to bio-diesel

Technology Policy International

4.2.1 State Government Initiatives

www.technopoli.net

Addressing Global Climate Change

p. 36

For many decades, California’s state government has successfully regulated
air pollutants,11 promoted energy conservation,12 and promoted clean energy
sources.13

Recently, the state government has taken several important regulatory steps toreduce GHG emissions: a 2004 ARB “greenhouse gas” rule (the first in the US) that
requires automakers to begin selling vehicles with reduced GHG emissions by modelyear 2009; a 2006 law, Assembly Bill (AB) 1811, on alternative fuels; and most11

State regulation of air pollutants began with a 1947 California law that authorized
the creation of an air pollution control district in every county of the state and a 1959
law that required air quality standards and controls for motor vehicle emissions. In
1967, the Federal Air Quality Act allowed the State of California a waiver to set andenforce its own emissions standards for new vehicles, and that same year Governor
Ronald Reagan signed state legislation that established the California Air Resources
Board (ARB), the state’s air quality regulator. In 1975, ARB required the first twoway catalytic converters in cars, in 1976 it limited lead in gasoline, and in 1988 it
required that cars be equipped with on-board computer systems to monitor emission
performance. Source: Air Resources Board, “California’s Air Quality History Key
Events,” http://www.arb.ca.gov/html/brochure/history.htm More recently, the ARB
has required car companies to sell thousands of “zero-emission” vehicles (hydrogenor electric) and hybrids. See, for example, Joseph B. White, “Getting All the Carbon
Out of Cars,” The Wall Street Journal, April 7, 2008.
12
California has long been a leader in energy conservation, especially for household
appliances. See, for example, Arthur H. Rosenfeld, Commissioner, California Energy
Commission, “California’s Success in Energy Efficiency and Climate Change: Past
and Future,” May 24, 2007, http://www.energy.ca.gov/2007publications/CEC-9992007-026/CEC-999-2007-026.PDF
13
California has also long pursued clean energy sources for electrical generation. Thisis partly a matter of geography: mountain rivers offer opportunities for dams andhydroelectric power, and volcanic areas provide limited but important opportunities
for geothermal power. But air pollution considerations have also driven California’s
decisions. It is hard to avoid using gasoline in motor vehicles, so that the state hassought to reduce air pollution by using clean sources of electricity. California does
not use coal or oil for its power plants – although it imports some coal-produced
electricity from other states. California prefers natural gas, some nuclear power(controversial in California), hydroelectric power, some wind power, and mostrecently distributed renewable sources, particularly solar panels on California homes
and buildings that now plug into the California electrical grid. For an overview
California’s sources of electricity, see California Energy Commission, “California’s
Major Sources of Energy,” http://www.energy.ca.gov/html/energysources.html

Addressing Global Climate Change

p. 37

importantly 2006’s AB 32, the California Global Solutions Act.14

Under AB 32, the ARB will issue and enforce regulations to reduce
California’s 2020 GHG emissions to 1990 levels, a reduction of about 29 percent
from what the 2020 levels would otherwise be. The ARB is now writing a draft plan,
and will then issue regulations that will start taking effect in 2010. As part of theseregulations, it probably will create a major cap-and-trade system to control emissions.
The ARB is now consulting with stakeholders and technology experts to develop its
plan and regulations.15

California’s GHG emissions come primarily from four sources: transportation(41.2 percent of total emissions in 2002); industrial (22.8 percent); electric power(19.6 percent); and agriculture and forestry (8.0 percent). The ARB regulations will
try to reduce emissions from all four sources.

One important point is that California’s government is not relying just on
emissions regulations to meet AB 32’s goals. As discussed earlier, it also promotes
the use of existing energy-efficiency measures and renewable-energy technologies tohelp meet the 2020 target. In the energy-efficiency area, for example, California has
high electric prices (which have encouraged conservation and made California themost electricity-efficient state in the US); a “Green Building Initiative;”16 and updated
appliance efficiency regulations.17 In the renewables area, it has a “renewable
portfolio standard” (RPS)18 and offers tax credits to encourage the use of renewableenergy.19 The state also funds approximately $62 million a year in energy researchand development to help develop new technologies for the future.20

14

Air Resources Board, “California’s Air Quality History Key Events.”
The 29 percent figure comes from Lawrence H. Goulder, “California’s Bold New
Climate Policy: The Challenges Ahead,” Policy Brief, Stanford Institute for
Economic Policy Research, November 2006,
http://siepr.stanford.edu/papers/briefs/policybrief_nov06.html
16
See: http://www.energy.ca.gov/greenbuilding/index.html
17
See: http://www.energy.ca.gov/appliances/index.html
18
On the RPS, see: http://www.energy.ca.gov/portfolio/index.html
19See, for example, the California Solar Initiative. Approved in January 2006 by the
California Public Utilities Commission (PUC) – with active support from Governor
15Addressing Global Climate Change

p. 38

Based on opportunities to use technology to reduce GHG emissions, in 2006
the California government’s Climate Action Team examined how existing
technologies and other steps (such as reduced driving and forestry management) could
be used to meet AB 32’s targets. Table 1 summarizes the Team’s conclusions.21 The
Air Resources Board will now decide exactly what steps it wants to take and whatregulations are necessary to implement those steps.22

Schwarzenegger and the California Legislature – it authorizes $3.2 billion in statefunding over 11 years to offer rebates for rooftop solar systems. This program issometimes called the “million solar roofs” initiative. See:
http://www.cpuc.ca.gov/PUC/energy/Solar/ California also offers rebates on windand fuel cell systems. See: http://www.consumerenergycenter.org/erprebate/
20
R&D is through California Energy Commission’s Public Interest Energy Research(PIER) Program. See: http://www.energy.ca.gov/pier/21
This table comes from Goulder and is adapted from the March 2006 report from the
California Climate Action Team. For a detailed list of specific regulatory actions the
ARB could take, see Air Resources Board Staff, Expanded List of Early Action
Measures to Reduce Greenhouse Gas Emissions in California Recommended for
Board Consideration, October 2007,
http://www.arb.ca.gov/cc/ccea/meetings/ea_final_report.pdf
22
It is likely that the ARB will try to write its regulations to encourage not only the
diffusion of existing technologies but also the development of new innovativetechnologies. And of course California’s research institutions and entrepreneurs hope
to develop and sell these innovative technologies. For an example of how California
policy analysts are thinking about the innovation topic, see: Margaret Taylor, Edward
W. Rubin, and Gregory F. Nemet, “Chapter 3: The Role of Technological Innovationin Meeting California’s Greenhouse Gas Emission Targets,” in W. Michael
Hanemann and Alexander E. Farrell, Managing Greenhouse Gas Emissions in
California, January 2006, http://calclimate.berkeley.edu/3_Innovation_and_Policy.pdf
Also see Economic and Technology Advancement Advisory Committee, Final
Report: Technologies and Policies to Consider for Reducing Greenhouse Gas
Emissions in California, a report to the California Air Resources Board, February 11,
2008, http://www.arb.ca.gov/cc/etaac/ETAACFinalReport2-11-08.pdf

Addressing Global Climate Change

4.2.2 Examples of “Bottom-up” Initiatives from Local Governments

p. 39

Addressing Global Climate Change

p. 40

As in other parts of the United States, dozens of California cities haveinitiatives to reduce energy use and GHG emissions. These initiatives can include
green buildings, more solar energy, less polluting vehicles, improved public transit,
and other steps. Because this chapter must be brief, we will cite just two examples.
One is modest, and the other is very ambitious.

The modest but valuable example comes from San Francisco, where in
November 2007 the city completed its yearlong project to convert all of its public
buses to biodiesel fuel. The buses are now using soy oil bought from producers in theAmerican Midwest.23

The ambitious example comes from San Jose, California. In October 2007
Mayor Chuck Reed announced his “green vision,” which calls on citizens todrastically cut energy use, proposes that the city to get its energy from renewablesources, and envisions 25,000 new clean-tech jobs by 2022, mostly from the solar
industry. That number sounds high, but already Silicon Valley is becoming a major
center for the US solar industry.24

4.2.3 Examples of Initiatives from Utilities and Other Private Companies

One of the most important features of California’s energy policy allows andencourages electrical utility companies to push for conservation and efficiency andstill earn good profits. Traditionally, the more electricity a utility sold, the more profit
it made. California has changed that policy, giving rewards to utilities for promoting
efficiency. This method for utility profits combines with California’s high electricity
costs to give the state the lowest per capita energy use in the United States. And if
one looks at Web sites for California utility companies, they are full of information on
how to conserve.25

23

Carolyn Marshall, “San Francisco Fleet is All Biodiesel,” The New York Times,
December 2, 2007.
24
Matt Nauman, “San Jose mayor unveils green vision, San Jose Mercury News,
October 5, 2007.
25
See, for example, Pacific Gas and Electric’s home page for residential users (“formy home”), at: http://www.pge.com/myhome/Addressing Global Climate Change

p. 41

Four Sets of Actions in California: thePrivate Sector

Large companies seek to reduce costs by increasing efficiency
 CA already has high electricity prices and lowest per-capita
electricity use in US
 Many large companies see financial savings in efficiency
and more solar
Entrepreneurs and research institutions very active on “green
technology”
 Venture capitalists investing in clean tech ($2.9B in US in
2006, half in CA)
 UC Berkeley & Lawrence Berkeley Lab--$500M from BP
for work on bio-fuels

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In addition, many of the large California companies that use electricity alsoemphasize energy efficiency and renewable energy. Energy efficiency, of course,
saves money, and this is an important reason for efficiency programs within company
offices and factories. In addition, creating energy-efficient products can also help
companies with their sales. Hewlett-Packard is an example of both points: it isreducing its own electrical use and GHG emissions,26 and it emphasizes the benefitsof its new energy-saving personal computers, workstations, and servers.27 As forrenewable energy,
Google has launched an ambitious program to place large numbers of solar panels on
its buildings.28

Many general manufacturing companies in California are concerned that AB
32 may lead to higher energy prices. In August 2006, for example, the California
Manufacturers and Technology Association (CMTA) described the proposed AB 32

26

See:
http://www.hp.com/hpinfo/globalcitizenship/environment/operations/climate.html
27
See: http://www.hp.com/hpinfo/globalcitizenship/gcreport/energy/products.html
28
Information on the Google Solar Panel Project is available at:
http://www.google.com/corporate/solarpanels/home?gsessionid=rCu5FT5iygU.

Addressing Global Climate Change

p. 42

as a big risk to the California economy.29 But after AB 32 became law, theAssociation-affiliated “AB 32 Implementation Group” began working with the Air
Resources Board. Today, the Association is still concerned about how AB 32
regulations might hurt California business, but it is also now very interested increating and retaining “green-collar jobs” – jobs in the clean-tech sector.30

4.2.4 Entrepreneurs, Research Institutions and Non-Profit Organizations

In California, many venture capitalists, university professors, andentrepreneurs hope that clean-tech is “the next big thing” – the next big technologybased industry. They want California to lead the way in the creation of newcompanies, jobs, and profits. California is in an excellent position to develop newclean-tech companies: it has world-class research institutions (e.g., the University ofCalifornia at Berkeley, Lawrence Berkeley National Laboratory (LBNL), andStanford University), venture capitalists, and a tradition of entrepreneurship. The San
Francisco Bay Area, for example, has important research programs in biofuels – some
supported by $500 million that BP gave UC Berkeley and LBNL for biofuels research– and several new companies making photovoltaic solar panels.

And the venture capitalists are investing large amounts of money in cleantech: in 2007, venture capitalists invested $1.79 billion in California clean-technology
companies (compared to $1.18 billion in 2006), with $1.05 billion of that amountinvested in Silicon Valley (compared with $509 million in 2006). (Overall North
American venture investments in clean-tech in 2007 were $3.95 billion, comparedwith $2.87 billion in 2006.)31

29

See: http://www.cmta.net/coalition_event.php?coalition_event_id=17
See Gino DiCaro, “Green tech jobs need stimulus despite – and because of – AB32,” February 29, 2008, blog posting, http://www.cmta.net/mpowered_blog.php
31
Matt Nauman, “’Green” energy cleans up in ’07,” San Jose Mercury News, January
18, 2008. It is not clear, however, whether Silicon Valley start-up companies or large
established companies will be most successful in clean-tech businesses. For aninteresting discussion of this issue, see: Emma Duncan, “Cleaning up: A special
report on business and climate change,” The Economist, June 2, 2007.
30

Addressing Global Climate Changep. 43

California also has non-profit groups that promote energy efficiency andrenewable energy. Some are environmental groups and other policy-orientedorganizations that provide political support for AB 32 and similar policies. But
California also has non-profit groups focused on technology. These are generally
enthusiastic people who believe that some technological change will help, and theywant both to prove the technology and to build public awareness. For example, theCalifornia Cars Initiative (“CalCars”) supports the idea of plug-in hybrid electricvehicles. They convert hybrid cars, especially the Toyota Prius, into plug-in
vehicles.32

4.2.6 Interactions Among These Groups

One important point is that the “top-down” actions of California state
regulators and the “bottom-up” initiatives of cities, companies, entrepreneurs,
researchers, and non-profit organizations are not separate and unconnected. In
California, these groups all talk to each other and learn from each other. In particular,
the Air Resources Board and other state government officials have advisorycommittees and open meetings in which they hear the ideas and concerns of majorgroups. So, for example, the ARB will hear what Pacific Gas and Electric, HewlettPackard, Google, and start-up companies have learned about the most effective andleast costly ways of reducing GHG emissions. And economists and technology
experts from California’s universities will provide valuable information and analyses.
California has developed a type of “policy and technology ecosystem” that will help
as the state implements AB 32.

4.3 What Will Happen Next in California?
32

The CalCars Web page (www.calcars.org/about.html) has this description of thegroup: “The California Cars Initiative (CalCars.org) is a Palo Alto-based nonprofit
startup of entrepreneurs, engineers, environmentalists and consumers promoting
100+MPG plug-in hybrid electric vehicles (PHEVs). Somewhat uniquely, we'reourselves a hybrid, focusing both on public policy and technology development, andharnessing buyer demand to help commercialize PHEVs. We're building demand
among highly receptive markets to encourage auto makers to produce 100+MPG ‘nosacrifices’ high-performance, clean hybrid cars.” In the history of the California
computer industry, similar non-profit groups eventually help create importantcompanies (such as Apple); that may also happen with clean-tech.

Addressing Global Climate Changep. 44

What Will Happen Next in California?


CA’s effort is driven by a powerful mixture of fear (of global warming),
environmental values, technological optimism, and greed (people hope to get richby creating new industries)
AB 32’s goal of reducing 2020 emissions to 1990 levels is very ambitious






However, CA has a long tradition of setting strict but achievable emission
standards and then seeing improved technology meet those standards






Requires about a 29% cut below 2020’s “business as usual” level
CA already has high electrical efficiency, nuclear power is unpopular, and new
low-cost technologies for alternative energy (e.g., solar) are not yet available
California voters will object if energy costs increase greatly

CA’s government is very experienced in regulating air pollutants
Large public and private investments in CA universities, federal labs, andcompanies are beginning to create new technologies

As in past technology “booms” in California, many investors in clean tech willlose money but some ideas will likely create major new industries and jobs
No one can predict the eventual outcome, but CA is making a huge effort

Technology Policy International

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California’s AB 32 goals are extremely ambitious, and particularly ambitious
because Californians want to reduce global warming without incurring higher taxes,
significantly more expensive energy, or big changes in their life-styles. In addition,
California faces a huge challenge because of its steady rise in population. The state
currently has 36 million people. By 2025, it could have 50 million people – and withthem more cars, more power plants, and more of every other source of GHG
emissions.
But along with these challenges, California also has three great strengths.

First, it has – at least today – a strong political coalition that wants to fightglobal warming. This coalition is driven by a mixture of love for California’s natural
beauty; fears that global warming might lead to less water, more fires, and an eroding
shoreline; and the greed and ambition that comes from wanting to create the next big
American industry.

Second, California has capable and confident environmental regulators.
Californians, like other Americans, are often cynical about government and, as
discussed above, they do not want higher taxes. But the Air Resources Board, theAddressing Global Climate Changep. 45

California Energy Commission, the Public Utilities Commission, and other California
agencies have decades of experience in understanding technology and setting
successful regulations.

Third, the state’s researchers, venture capitalists, and entrepreneurs have along tradition of understanding existing technologies, creating new ones, and building
companies around both types of technology. If, as this section has suggested,
Californians see technology as the preferred solution to global warming, then at least
the state has major technological capabilities.

Addressing Global Climate Change

p. 46

5. ILLUSTRATIONS OF PRIVATE INITIATIVES

5.1 Introduction

The United States is experiencing a “boom” in private sector initiatives to
respond to the challenge of climate change and the demand for energy conservation.
Even though the Federal government has not been aggressive in adopting or
implementing climate change-related public policies (other than support for researchand technology development), private interests across the spectrum from academia tomajor energy companies have taken steps to improve their own energy efficiency
performance and to promote the more efficient use of energy and reduction of GHG
emissions by their employees, customers and suppliers.

Illustrations of Private Initiatives
Academia Think Tanks and Consultancies
 Industry and Industry Associations
 Industry-Environmental Partnerships
Technology Policy International

www.technopoli.net

In this section, we review some illustrative examples of activities in academia,
by think tanks and consulting firms, and in both individual companies and industry
associations. We also note the growing trend toward alliances between industrial andenvironmental organizations – who are, of course, traditionally in opposition on many
fronts – to promote energy efficiency and the control of GHGs.

Addressing Global Climate Change

p. 47

5.2 Engagement of Academia

Many individual universities have made commitments at the institutional level
to incorporate environmental sustainability, energy efficiency and climate change
response into their teaching curricula, their research portfolios and their own
operations. Such institutional commitments are not common in U.S. universities;
more typically universities try to limit their engagement in social and political issues.
Instead, such engagement is usually carried out by individual faculty members andstudents and by student organizations. It is a measure of the seriousness with which
university administrators perceive the threat of damage to the environment thatsustains life itself from GHG emissions and energy consumption that presidents andsupervisory boards of universities have taken public positions in support of action.

Engagement of Academia: The
American College & University
Presidents Climate Commitment






Addresses adoption of climate-related technologies to limit
impact of the institutions on the Earth’s climate
More than 175 institutions—including many major ones—haveagreed to: Plan for climate neutrality as soon as possible
 Act immediately to reduce greenhouse gases
 Report regularly to the public on progress
Enjoys widespread support from industry, environmentalorganizations and associations of higher education leaders
Disseminates concrete guides to action to members

www.presidentsclimatecommitment.org/

Technology Policy International

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One such example is the “American College and University Presidents
Climate Commitment.” More than 175 institutions, including some of the largest andmost prestigious, have signed onto a commitment to plan for making their own
campuses “climate neutral” as soon as possible. Even sooner than that they have

Addressing Global Climate Changep. 48

committed to making immediate reductions in their GHG emissions or at least in their“carbon footprint” by investing to reduce energy use, by fuel switching, and bypurchasing carbon offsets on world markets. They have also agreed to be held
accountable for accomplishing their commitments by publishing periodic reports on
their institution’s progress. In order to move the Commitment beyond rhetoric andinto action, the organization disseminates guidelines to its members on concrete
action they can take to reduce their climate impact.

Higher educational institutions are large, expensive and financial stressed inmost cases. Because many of them budget separately for operating costs and forcapital investments, they are not always well-positioned to make rational life-cyclebased decisions about energy-related investments. For these reasons, as a group they
offer attractive opportunities for improving performance through the adoption ofclimate-saving measures and investments that will more than compensate for their upfront costs. Technology diffusion incentives and information may, therefore, beparticularly effective in helping this large and important sector to upgrade its facilities
and practices.

The Commitment’s web site (www.presidentsclimatecommitment.org)
includes long lists of companies, organizations and associations that have endorsed
this action by the universities, including, importantly, such organizations as the
National Association of College and University Business Officers, whose members
typically oversee campus operations.

Addressing Global Climate Changep. 49

Engagement of Academia: The
Association for the Advancement of
Sustainability in Higher EducationMembers are academic institutions working to enhance“sustainability” on their campuses, in teaching, research, andcampus operations
Hundreds of leading universities, colleges, 2-year colleges,
companies, associations and government agencies are members
AASHE plays a major role in disseminating information about“best practices,” useful technologies, sustainability curricula, etc

www.aashe.org

Technology Policy International

www.technopoli.net

Another illustration of the engagement of academia in the field of climatechange response is the new Association for the Advancement of Sustainability inHigher Education (AASHE). It has hundreds of member institutions including
universities, colleges, two-year colleges, companies, associations, and government
agencies that are working to enhance sustainability on academic campuses. AASHE
plays an important role in disseminating best practices and information about usefultechnologies, as well as curricular materials. Thus, one of its core functions is toencourage diffusion of more efficient, existing technologies to the higher education
sector.

5.3 Engagement of Think Tanks and Consultancies

It is characteristic of the U.S. policymaking system that the nation’s vast arrayof non-profit think tanks and profit-making consulting firms produce numerous
studies and analyses of any and every newly recognized policy problem that comesalong. Interest groups establish their bona fides in part by commissioning studies that
purport to establish a factual basis for promoting policies that would serve their needs.

Addressing Global Climate Change

p. 50

Climate change policy is no different from other policy areas in this respect.
Many organizations have produced or are producing studies in this area. For example,
the National Research Council of the National Academies of Science and Engineeringand the Institute of Medicine has embarked on a major new comprehensive study ofenergy policy emphasizing responses to global environmental challenges. This
committee for this study, which is entitled, “America’s Energy Future: Technology
Opportunities, Risks, and Tradeoffs,” sponsored a major national Summit on
America’s Energy Future on March 13 and 14, 2008.33 A central theme of theSummit’s many presentations was that a great deal of progress can be made byadoption of more efficient technologies that create less environmental and climatechange damage and that are already available. In other words, most of the speakers at
this high-level meeting recognized the importance of diffusing existing technologies,
even as they also talked about the importance of research and development in thelonger term.

Engagement of Leading Non-Profit
Independent Think Tanks
Resources for the Future
 U.S. Climate Policy Forum Forum analyzed “Climate Technology Deployment Policy,”noting barriers to deployment and policies to overcome them Participants include 23 major U.S. Corporations including
energy, autos, chemicals, financial
Brookings Institution
 Hamilton Project studies on economic approaches toreforming energy policy and addressing climate change
George C. Marshall Foundation
 Houses leading climate change skeptics

Technology Policy International

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Several other important studies have been made or are under way in the fieldof technology diffusion and climate change response. For example, the non-profit
33

The full text and presentation materials for this summit meeting are available on line
at the Summit’s web site:
http://www7.nationalacademies.org/energysummit/energy_summit_agenda.html

Addressing Global Climate Change

p. 51

think tank, Resources for the Future, which does studies largely from an economic
perspective, has established the U.S. Climate Policy Forum, with the support of sometwo dozen major U.S. corporations from a variety of industries. A major report of theForum released in the fall of 2007 included an in-depth analysis of the potential for
federal technology deployment policies to help overcome barriers to the adoption of
improved technologies.34

The Brookings Institution, a long-established mainstream policy think tank,has issued three reports on climate policy options as part of its Hamilton Project thatseeks to develop informed policy alternatives across a wide range of policy areas
affecting economic growth and the standard of living of Americans.35 In addition,
Brookings has hosted numerous seminars and high-level workshops on topics
affecting climate change, including a March 3, 2008, discussion between high-level
Japanese and U.S. climate policy advisors.36

It would be somewhat misleading to suggest that every interest in the UnitedStates supports vigorous action to control climate change. Prominent among thegroups that seek to discredit the scientific consensus on climate change is the George
C. Marshall Institute in Washington DC, which issues reports from time to time on
various aspects of the climate change debate.37

34“Assessing U.S. Climate Policy Options,” November 2007. On line at:
http://www.rff.org/rff/Publications/CPF_AssessingUSClimatePolicyOptions.cfm
35
One of these is a paper by Robert Stavins on a cap and trade system(http://www.brookings.edu/papers/2007/10climate_stavins.aspx), one by Gilbert
Metcalf is on a carbon tax(http://www.brookings.edu/papers/2007/10carbontax_metcalf.aspx), and the third by
Joseph Furman and colleagues addresses a broader economic strategy for controllingclimate change(http://www.brookings.edu/papers/2007/10climatechange_furman.aspx
36
Links to a number of these activities are at:
http://www.brookings.edu/topics/climate-change.aspx
37
A number of the Marshall Institute’s papers and reports can be found at:
http://www.marshall.org/subcategory.php?id=9 The Institute should not be confusedwith the George C. Marshall Foundation in Lexington, VA, which is devoted to public
policy education and to honoring the life of General Marshall.

Addressing Global Climate Changep. 52

McKinsey & Company/ The Conference
Board Study of Reducing Greenhouse
Emissions
Cooperative project of McKinsey, The Conference
Board, five private companies, and two major national
environmental organizations
 No government funding or support
 Report “examined opportunities to reduce GHG
emissions from human activity within U.S. borders
using tested approaches and high-potential emerging
technologies”
 Looked at more than 250 GHG abatement options
“Reducing U.S. Greenhouse Emissions: How Much at What Cost,” December 2007.

Technology Policy International

www.technopoli.net

Of particular interest to the subject of diffusion of existing technologies toaddress climate change is a study done by the blue-chip consulting firm, McKinsey
and Company, in cooperation with the Conference Board, an association of theleadership of major corporations.38 Interestingly, the sponsors of the report also
included five private companies and two of the nation’s largest environmentalorganizations. The report examined the potential for reducing GHG emissions foreach of some 250 technologies and operational changes. Many of the 250 and most of
the most immediately attractive options in terms of reducing GHG represent theapplication of existing technologies, rather than the development of as-yet untried
new technologies. A strong point of the report is its excellent graphical display of allof the options along two axes, cost and GHG reduction. In essence, the report offers afully-developed “supply curve” for GHG reduction technologies.

5.4

38

Engagement of Business Associations

McKinsey and Company, “Reducing U.S. Greenhouse Emissions: How Much at
What Cost,” December 2007. The report can be downloaded for free at theConference Board web site: http://www.conferenceboard.org/publications/describe.cfm?id=1384

Addressing Global Climate Changep. 53

Engagement of Business Associations –Example 1

Building location, design and operation have major effects onenergy consumption and therefore on greenhouse gas emissions
and the environment in general
U.S. Green Building Council
 12,000 organizations in the building-related industries
 LEED Green Building Rating System) Private, voluntary consensus based approach to rating
systems for high-performance, sustainable buildings
 Encourages use of existing energy-saving technology
 Educational programs for people in the building industry –>54,000 participants
www.usgbc.org

Technology Policy International

www.technopoli.net

Many private companies have recognized that there is money to be made inmarketing, selling, and constructing products and services that can make a credible
claim to be “green.” A leading illustration of this trend is the building constructionindustry, which has created the U.S. Green Building Council (www.usgbc.org), whichclaims membership of more than 12,000 organizations in the building relatedindustries. It has established the LEED Green Building Rating System which allows
building designers, owners and builders to assess their building’s performance against
a relatively objective set of performance targets and design criteria. The LEED
system is private and voluntary and does not involve government, other than as aninterested observer and building customer. The LEED system encourages use ofexisting energy-saving technology and is not a technology development strategy.

Addressing Global Climate Change

p. 54

Engagement of Business Associations –Example 2








Major companies are finding it useful to partner with leading
environmental organizations to discuss and address climatechange issues
A process of overcoming old confrontational interactions
U.S. Climate Action Partnership (USCAP)
 “USCAP is an expanding alliance of major businesses andleading climate and environmental groups that have cometogether to call on the federal government to enact
legislation requiring significant reductions of greenhousegas emissions.”
USCAP advocates policies to encourage technology diffusionand deployment
Members include 27 major corporations and six leading
environmental organizations

www.us-cap.org

Technology Policy International

www.technopoli.net

The U.S. Climate Action Partnership (USCAP) (www.us-cap.org) is anunusual alliance of more than 27 major corporations and six leading environmentalorganizations which has come together to “call on the federal government to enact
legislation requiring significant reductions of greenhouse gas emissions.” USCAP
also encourages policies that would encourage technology diffusion and deployment.

USCAP represents an interesting undercurrent in the national debate overclimate change policy. While the Bush Administration and, until recently, theCongress have been very reluctant to embrace mandates or incentives for GHG
reductions, there is a sense among many industrial corporations, and certainly among
environmentalists, that it is only a matter of time until tough new limitations are
imposed on GHG emissions in the United States. So long as the policy stalemate
exists, companies face a highly uncertain environment for making long-term
investments in new plant and equipment that may impact the environment. Membersof organizations like USCAP hope to accelerate the resolution of the uncertainty and,of course, hope to influence the nature of the control policies that are ultimately
adopted.

Addressing Global Climate Changep. 55

Other Examples of Industry Initiatives


Carbon Disclosure Project – 2008
 12 U.S.-based multinationals including HP, Pepsico,and Procter and Gamble
 Assessing GHG emissions from supply chains Encourage suppliers to measure and manage their GHG
emissions

Council on Competitiveness, Energy Security,
Innovation and Sustainability Initiative – 2008
 To promote “…private sector demand for sustainableenergy solutions….”
 Will develop an action agenda
Technology Policy International

www.technopoli.net

The Carbon Disclosure Project established in 2008 is an effort by twelve
major U.S.-based multinational corporations to incentivize their supplier firms to
manage their GHG emissions. In light of the complex patterns of outsourcing to
suppliers, these firms recognize that they cannot make effective claims that they are
producing their goods for sale in “sustainable” ways unless there is some assurance
that their suppliers are following sustainable practices.

Another interesting example is the U.S. Council on Competitiveness projecton Energy Security, Innovation and Sustainability announced in 2008. The Council,
which was established in the middle 1980s as a forum for discussion of how theUnited States might best respond to the competitiveness challenge from Japan andelsewhere, is an organization whose members are corporate CEOs, university
presidents, and labor organization leaders. That they have turned their considerable
influence and energies to “promote private sector demand for sustainable energy
solutions” is an indicator, once again, of the desire of the private sector for greatercertainty in the future demands for GHG controls and in the availability oftechnologies that can meet those demands.

Addressing Global Climate Changep. 56

Walmart’s Compact Florescent Light
Bulb Initiative
Walmart is the largest retailer in the United Stateswith hundreds of large discount department stores all
across the nation
 As has happened in many firms, Walmart hasestablished a “sustainability” initiative at thecorporate level http://livebetterindex.com/sustainability.html
 Walmart set a corporate goal of selling 100,000,000
compact florescent light bulbs and achieved that goal
within a few months.
 Walmart reports objective indicators of progress
toward its sustainability goals at its web siteTechnology Policy International

www.technopoli.net

Our final illustration of private activities to control GHG emissions andimprove energy efficiency is Walmart’s compact fluorescent light bulb (CFL)
initiative. Walmart is the largest retail sales corporation in the United States and, infact, in the World, so its corporate strategies can have a major impact on the realities
of how consumers shop, buy, and use products. Under the more general rubric of its
sustainability initiative, Walmart decided to try to encourage the purchase and use of
one hundred million CFLs, or about one such bulb per American household. The
results far surpassed their publically stated goal – they sold that many bulbs in just a
few months.

More interesting, perhaps, than this initial foray into green marketing is thefact that Walmart now collects data on its progress toward its sustainability initiatives
and reports those data regularly on its sustainability web site.

Addressing Global Climate Change

p. 57

6. CONCLUDING OBSERVATIONS AND QUESTIONS FOR THE FUTURE

Concluding Observations
A vibrant, grass-roots movement is underway in the
U.S. to address the challenges of global climatechange This movement involves a wide array of state andlocal governments, non-profit organizations, andcompanies It also includes some innovative new partnerships
among organizations more accustomed toconfrontation than cooperation
 The stage is set for an aggressive new approach toFederal climate change policy following the U.S.
national elections in November 2008
Technology Policy International

www.technopoli.net

The grassroots initiatives mounted by cities, states and regions in the U.S. toaddress the challenges of climate change have been in existence for about a decade.
As of this writing, they seem only to be increasing in number and intensity. Indeed,
one of the challenges in writing this report was simply to keep up with the constantstream of new developments – a true “movement” from the bottom up which bothurges and demonstrates that something must be done.

It was not only the number of the initiatives that presented a researchchallenge. In addition, the initiatives uncovered are highly diverse, involving a very
wide array of state and local governments, regional entities that have been newly
formed for the purpose, non-profit organizations both old and new, and private, profit
making companies being pushed in new directions.

One of the most interesting organizational phenomena now being seen is thecreation of innovative new alliances and partnerships. Many of these are frankly
surprising as well, in that they bring together in common cause organizations thathave in the past been more accustomed to confrontation than cooperation. They alsoAddressing Global Climate Change

p. 58

tend to span a wide diversity of actors, from local government to environmentalgroups, to think tanks, to companies in sectors as different as energy and insurance.
And they span a wide variety of institutional forms.

It is undeniable that “the action” in the U.S. at the moment is not at the Federal
level. Nevertheless, we believe that the stage is set for an aggressive new approach toFederal climate change policy before long. If the “laboratories of democracy” theory
continues to have explanatory power, then such a development would seem to be
inevitable. Given the reality of a Presidential election in November 2008, it is highly
unlikely that any major policy initiatives will occur before 2009. On the other hand,the fact that all three of the current major Presidential contenders are on record infavor of strong new policies to address climate change suggests that major national
initiatives are likely to occur soon in the new Administration.

Concluding Questions
What can be accomplished through grassroots action
absent Federal policy?
 What will be the role of regions, state and localities,
assuming Federal policy materializes?
 To what extent will business invest absent Federal
policy?
 How much can technological diffusion contribute to
the solution to climate change?
 What balance should be struck between the emphasison diffusion and on innovation?
 What kind of Federal policy will be most effective inpromoting technological change?
Technology Policy International

www.technopoli.net

This report has deliberately focused on only a single type of strategy foraddressing the challenges of global climate change: small-scale, bottom-up, grassroots efforts that are directed toward technology diffusion. In the U.S., suchinitiatives are proceeding independently of national policy, and – to reemphasize an
unfortunate truth – in the absence of Federal policy. While we believe that theAddressing Global Climate Change

p. 59

strategy explored herein is of extraordinary value, we certainly cannot say that it is the
only – or perhaps even the paramount – strategy needed to address global climatechange. Thus, it is appropriate to end this report with a series of open-ended, hardquestions about the role of technological diffusion and grass roots action in the overall
policy scheme in the U.S.:

39•

What degree of progress can be achieved absent Federal policy? Are thepolicy levers over which states and localities have control so small as not tomake a difference in the light of Federal inaction in the areas it controls, suchas automotive fuel efficiency?

•

Assuming that an aggressive Federal policy does materialize, what will be therole that localities continue to play? In other environmental contexts (e.g.
clean air and water), the states have largely been assigned an implementingrole and localities are largely irrelevant.

•To what extent will businesses in the private sector really invest in energysaving and other “green” technologies absent a Federal mandate to do so?
And to what extent will R&D investments in new technology be made withouta clear and certain trajectory of national policy?

•

How much can the diffusion of existing technologies really contribute to thesolution to global climate change? This is a debate that is currently at theforefront of discussion in the U.S. 39•

Given the reality that technological change across the entire spectrum isnecessary, what kind of balance in public and private policy should be struck
between efforts to generate new technologies and to improve and diffuse
existing ones?40•

Assuming that aggressive new policies will arise at the national level in the
U.S., what approach is likely to be most effective in encouraging technologicalchange, both innovation and diffusion? In particular, what can be said about
the virtues of a cap and trade system as opposed to a carbon tax, which are thetwo most-discussed options?

See “ A Shift in the Debate Over Global Warming,” Andrew C. Revkin, New YorkTimes, April 6, 200840
See “MIT’s Burgeoning Role in the Green Movement,” by Susan Hockfield(President of MIT) Boston Globe, April 7, 2008. See:
http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/04/07/mits_burgeoning_role_in_the_green_movement/