Reorienting State Climate Change Policies to Induce Technological Change
45 Pages Posted: 10 Sep 2008
Date Written: September 8, 2008
This Article challenges the prevailing view that state action on climate change is misconceived because it cannot meaningfully impact greenhouse gas emissions. We argue that inducing technological change provides an independent ground for state programs; one can think globally and still act locally. Technological innovation is essential to successful climate policy and subject to a distinct market failure - technology spillovers that undermine investment incentives. State action can significantly enhance technological change, as promoting innovation is less dependent on large-scale government action and its inherent uncertainties favor the diversity sustained by multiple state programs. These observations suggest a two-tiered strategy: primary federal responsibility for reducing greenhouse gas emissions while state policies focus on promoting technological change. The Article concludes by proposing measures designed to support this complementary federal-state framework.
Keywords: Climate Change, Federalism, Innovation Policy, Inducing Technological Change
JEL Classification: K23, K32, O33, O38
Suggested Citation: Suggested Citation