Global Climate Change: Three Policy Perspectives

Congressional research reportNov 26, 2008

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Prepared for Members and Committees of Congress

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The 1992 U.N. Framework Convention on Climate Change requires that signatories, including

the United States, establish policies for constraining future emission levels of greenhouse gases,

including carbon dioxide (CO2). The George H. W. Bush, Clinton, and George W. Bush

Administrations each drafted action plans in response to requirements of the convention. These

plans have raised significant controversy and debate.

This debate intensified following the 1997 Kyoto Agreement, which, had it been ratified by the

United States, would have committed the United States to reduce greenhouse gases by 7% over a

five-year period (2008-2012) from specified baseline years. Controversy is inherent, in part,

because of uncertainties about the likelihood and magnitude of possible future climate change, the

consequences for human well-being, and the costs and benefits of minimizing or adapting to

possible climate change. Controversy also is driven by differences in how competing policy

communities view the assumptions underlying approaches to this complex issue.

This paper examines three starting points from which a U.S. response to the convention is being

framed. These starting points, or policy “lenses,” lead to divergent perceptions of the issue with

respect to uncertainty, urgency, costs, and government roles. They also imply differing but

overlapping processes and actions for possible implementation, thus shaping recommendations of

policy advocates concerning the federal government’s role in reducing greenhouse gases.

A technological lens views environmental problems as the result of inappropriate or misused

technologies. The solutions to the problems lie in improving or correcting technology. The

implied governmental role would be to provide leadership and incentives for technological

development.

An economic lens views environmental problems as the result of inappropriate or misleading

market signals (prices). The solutions to the problems lie in ensuring that the prices of goods and

services reflect their total costs, including environmental damages. The implied governmental

role would be to improve the functions of the market to include environmental costs, so the

private sector can respond efficiently.

An ecological lens views environmental problems as the result of indifference to or disregard for

the planet’s ecosystem on which all life depends. The solutions to the problems lie in developing

an understanding of and a respect for that ecosystem, and providing people with mechanisms to

express that understanding in their daily choices. The implied governmental role would be to

support ecologically based education and values, as well as to promote “green” products and

processes, for example through procurement policies, efficiency standards, and regulations.

Some initiatives are underway; all the perspectives are relevant in evaluating them and possible

further policies. The purpose here is not to suggest that one lens is “better” than another, but

rather to articulate the implications of the differing perspectives in order to clarify terms of debate

among diverse policy communities.

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Introduction ..................................................................................................................................... 1

Three Lenses for Viewing Solutions ............................................................................................... 2

Technological Lens ................................................................................................................... 4

Background......................................................................................................................... 4

Application to Global Climate Change............................................................................... 5

Economic Lens.......................................................................................................................... 9

Background......................................................................................................................... 9

Application to Global Climate Change..............................................................................11

Ecological Approach ............................................................................................................... 15

Background....................................................................................................................... 15

Application to Global Climate Change............................................................................. 18

The Three Lenses and Policy Approaches..................................................................................... 21

Cost Analysis as Viewed Through the Lenses......................................................................... 21

Technological Lens ........................................................................................................... 22

Economic Lens ................................................................................................................. 22

Ecological Lens................................................................................................................. 23

The Role of Science as Viewed Through the Lenses .............................................................. 24

Federal Policy As Viewed through the Lenses........................................................................ 25

Conclusion: Balancing the Three Lenses to Develop Policy......................................................... 27

Table 1. Results of 2000 Interlaboratory Working Group Study ..................................................... 8

Table 2. Influence of the Lenses on Policy Parameters ................................................................. 26

Table 3. Summary of Lenses ......................................................................................................... 26

Table 4. Review of Lenses Across Different Policymaking Criteria............................................. 28

Author Contact Information .......................................................................................................... 29

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Climate change policy actions are underway at state, federal, regional, and international levels.1

As a party to the United Nations Framework Convention on Climate Change, the United States

committed to the objective of achieving “stabilization of greenhouse gas concentrations in the

atmosphere at a level that would prevent dangerous anthropogenic interference with the climate

system”; and to preparing “national action plans” to address emissions of greenhouse gases.2

The domestic debate intensified with the negotiations relating to the Kyoto Protocol, agreed to in

December, 1997.3 Specifically, under the terms of the Kyoto Protocol, the United States would

have committed to reducing its average annual net carbon-equivalent emissions of six gases—

carbon dioxide (CO2), nitrous oxide, methane, perfluorocarbons, hydrofluorocarbons, and sulfur

hexafluoride—by 7% below 1990 levels (1995 for the fluorinated gases) over the five-year period

2008-2012. If it had been ratified by the Senate, the Kyoto Agreement would have moved the

debate beyond the mix of “study,” “no regrets,”4 and “voluntary actions” policies of the George

H. W. Bush, Clinton, and George W. Bush Administrations.

The Clinton Administration, however, never submitted the Kyoto Protocol to the Senate,5 and

subsequently President George W. Bush rejected it outright. In lieu of the approach of the Kyoto

Protocol, featuring binding commitments to reduce emissions by developed and transitional

nations, President George W. Bush proposed a two-pronged approach: one to focus on further

research and development to better characterize global climate change and its causes, the other to

reduce the amount of greenhouse gases emitted per unit of economic activity through voluntary

actions.6 In addition, on July 27, 2005, the Bush Administration announced formation of a sixnation Asia-Pacific Partnership on Clean Development and Climate (APP),7 with the goal of

meeting “national pollution reduction, energy security and climate change concerns, consistent

with the principles of the U.N. Framework Convention on Climate Change (UNFCCC)” through

“a voluntary, non-legally binding framework for international cooperation.”8 Additionally, in

See CRS Report RL34513, Climate Change: Current Issues and Policy Tools, by (name redacted).

The Senate consented to ratification of the U.N. Framework Convention on Climate Change on October 7, 1992, with

a two-thirds majority division vote; President H. W. Bush signed the instrument of ratification of the Convention on

October 13, 1992.

On the agreement, see CRS Report RL33826, Climate Change: The Kyoto Protocol, Bali “Action Plan,” and

International Actions, by (name redacted) and (name redacted).

Adopting a “no regrets” policy can be summarized as assessing policy options across the range of federal activities for

their potential impact on global climate change, and where alternative policies to achieve a goal otherwise appear

similar, adopt the one most consistent with protecting against the risk of global climate change. C. Boyden Gray and

David B. Rivkin, Jr., “A ‘No Regrets’ Environmental Policy,” Foreign Policy, summer 1991, pp. 47-65.

In July, 1997, prior to Kyoto, the Senate agreed by a unanimous vote 95-0 to S.Res. 98, stating that the Clinton

Administration should not accept an agreement that would seriously harm the economy or that did not require

developing countries to meet appropriate reduction requirements. The Clinton Administration signed the agreement,

saying that costs would not be excessive (particularly because it included emissions trading and joint implementation

provisions), and said it would be encouraging developing nations to participate. But the Clinton Administration never

submitted the Agreement to the Senate.

See http://www.whitehouse.gov/news/releases/2002/02/climatechange.html.

The other members are China, India, Japan, Australia, and South Korea.

Charter for the Asia-Pacific Partnership on Clean Development and Climate (January 12, 2006), “Purposes,” 2.1.1.

For additional information on APP, see http://www.asiapacificpartnership.org/ and “Asia-Pacific Partnership on Clean

Development and Climate: New Vision Statement of Australia, China, India, Japan, the Republic of Korea, and the

(continued...)

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May, 2007, the President announced that the United States would convene a meeting of the

world’s “major economies” that are responsible for most greenhouse gas emissions. Held in

September, 2007, the final statements of the “Major Economies Meeting on Energy Security and

Climate Change” emphasized the need to integrate such meetings into the overall UNFCCC

negotiations. The U.S. summary of the meeting focused on the “aspirational” nature of reduction

goals, reflecting the Administration’s rejection of mandatory reduction targets.9 A second meeting

was held in January, 2008.

Meanwhile, the Congress engaged in oversight and consideration of legislative initiatives. A bill

addressing climate change, S. 2191, reached the Senate floor in 2008, but after a series of

parliamentary maneuvers, the Senate failed to invoke cloture. With the new Administration taking

office in January 2009, changes in congressional membership, and new chairman of a key House

committee, Energy and Commerce, new legislative initiatives are expected for the 111th Congress.

Because of the uncertainties associated with global climate change—the extent to which global

climate change is occurring, what the effects might be and their magnitude, the economic and

social consequences that would follow from actions to reduce emissions of greenhouse gases, the

relationships between emissions and economic activity, the costs of actions or of taking no action,

the time frame of impacts, etc.—each individual’s perception of what, if anything, to do is

strongly influenced by personal and community values; perceptions of human progress and

adaptability; experience, education and training; and outlook in how to cope with risks and

uncertainty.10

These differing perspectives of persons affect their observations and interpretations of the issue,

influencing their decisions on whether policy interventions are necessary and, if so, what kinds of

intervention. At the same time, personal perspectives can change; new knowledge, education,

and/or moral suasion may impact on policymaking and individual and corporate behavior, and

may also be necessary to create conditions for successfully implementing initiatives relating to

climate change.

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The many personal proclivities and professional constructs that help shape an individual’s

perspectives on environmental issues in general, and global climate change in particular, can be

(...continued)

United States of America,” http://www.state.gov/g/oes/climate/app/75320.htm.

“Final Chairman’s Summary: First Major Economies Meeting On Energy Security and Climate Change,” White

House Council on Environmental Quality (September 27-28, 2007), at http://www.state.gov/g/oes/climate/mem/

93021.htm.

Implications of differing perceptions are discussed in, for example, Steven Kelman, What Price Incentives:

Economists and the Environment (Boston: Auburn Publishing Co., 1981); Lester B. Lave and Hadi Dowlatabadi,

“Climate Change: The Effects of Personal Beliefs and Scientific Uncertainty,” Environmental Science and Technology,

Vol. 27, no. 10 (1993), 1962-1972; Richard B. Norgaard and Richard B. Howarth, “Climate Rights of Future

Generations, Economic Analysis, and the Policy Process,” in U.S. Congress, House, Committee on Science, Space, and

Technology, Technologies and Strategies for Addressing Global Climate Change, Hearings, 17 July 1991 (Washington,

D.C.: U.S. Govt. Print. Off., 1992), pp. 160-173; and “Science and Nonsense in the Global Warming Debate,” ENDS

Report 233 (June 1993), 21-23.

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grouped into three perspectives that affect proposed policies. These perspectives, which can

intertwine and overlap, are:

•

that environmental problems are the result of inappropriate or misused

technologies, and that the solutions to the problems lie in improving or correcting

technology;

•

that environmental problems are the result of market failures, and that the

solutions to the problems lie in ensuring that market decisions take into account

all costs, including environmental damages; and

•

that environmental problems result from a combination of ignorance of,

indifference to, and even disregard for, the ecosystem on which human life

ultimately depends, as well as for the other living creatures that share the planet;

and that the solutions to environmental problems lie in developing an

understanding of and a respect for that ecosystem and in providing mechanisms

for people to express the priority they place on the environment in their daily

choices.

Each of these perspectives can be considered a “lens” through which individuals and policy

communities view the issue—a lens that provides a particular focus on the nature of the problem

and for the kinds of actions to solve it.11 For shorthand, they might be termed the technological

lens, the economic lens, and the ecological lens, respectively.

Each perspective and its associated policy approaches generally are sufficiently distinct that a

dominating tendency in policy options can be discerned. As policy frameworks, these lenses

incorporate terminology and methods associated with diverse academic disciplines and

professions, including not only engineering, economics, and ecological sciences, but also various

social sciences, jurisprudence, theology, and others. As policy frameworks, they should not be

confused with any one academic discipline or profession;12 rather, they are perspectives on

policymaking, on how to focus on a policy issue.

While the lenses can be analyzed as distinct perspectives, most of the time for most people they

represent predilections rather than conscious alternatives.13 The lenses differ primarily in what

aspects of the issue come into focus, resulting in some being magnified, others obscured, or even

distorted. The appropriateness of this focusing is dependent on the characteristics of the specific

issue and the orientation of the policymaker. Thus, a policymaker viewing global climate change

through one lens—say, the technological lens—is not necessarily disregarding economic or

ecological factors, although these factors tend to lie outside, and may be less discernible, than the

more clear focus on technological options.

Ultimately, given the diversity of policymakers and the potential overlapping of viewpoints, any

global climate policy considered will likely involve a mix of initiatives representing all of the

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

Hence, the economic lens should not be confused with the academic discipline of economics, nor the ecological lens

with ecological science. The frameworks are broader than any single discipline, incorporating a range of policyrelevant perspectives, depending on the personal experiences and knowledge of the policymaker.

See Marco Janssen and Bert de Vries, “The Battle of Perspectives: A Multi-Agent Model with Adaptive Responses

to Climate Change,” Ecological Economics 26 (1998), 43-65.

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perspectives.14 Such a mix may reflect mutual accommodation as much as conscious agreement

that a combination of approaches better ensures progress toward mitigation goals. The purpose

here is not to suggest that one lens is superior to another, but rather to articulate the differing

perspectives in order to facilitate communication among different parties and interests.

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Viewed through the technological lens, an environmental problem is an “opportunity” for

ingenuity, for a technical “fix.” This technologically driven philosophy focuses on research,

development, and demonstration of technologies that ameliorate or eliminate the problem. Many

uncertainties can be ignored if technology is available to render them irrelevant (a presumption

underlying the “pollution prevention” concept, for example). From this perspective, policy entails

the development and commercialization of new technologies; government’s role can include basic

research, technical support, financial subsidies, economic mechanisms, or the imposition of

requirements or standards that stimulate technological development and that create markets for

such technologies.

The relationship between environmental protection and technological development was

recognized early in the environmental debates and policymaking of the 1960s and 1970s.

Particularly in the area of mobile source pollution control, standards anticipated technological

development to achieve emissions reductions—commonly called “technology-forcing.” Although

some in industry argued that this was not an efficient means of encouraging technology

(particularly when the deadlines for compliance were short), the process undoubtedly stimulated

development.

Regulatory mandates can directly stimulate the commercialization of technology by creating

market opportunities. These mandates can be performance-based (meet an emissions level), or

technology-based (specify the performance of the technology used). For example, California and

14 other states have enacted legislation or regulations mandating that greenhouse gas emissions

from new passenger vehicles be reduced by 22% in model year (MY) 2012 and 30% in MY2016.

The degree to which these sorts of mandates have forced technologies has depended on the

perceived seriousness of problems (resulting in accelerated time frames for development, and in

very high levels of required performance), the ease of developing the needed technology, and the

impact of anticipated costs on consumers.15

Along with the use of a regulatory approach to forcing technology, the federal government has

also taken an active role in assisting private industry in developing pollution control technology.

Some environmentally important industries did not have strong research and development sectors

in the late 1960s and 1970s, or did not have ones that could easily be redirected toward pollution

control. This led to governmentally directed research and developmental efforts toward pollution

control technology. For example, the EPA spent approximately $2 billion supporting development

of a feasible flue gas desulfurization (FGD) device for electric utility use to control sulfur oxides.

See, for example, Thomas L. Friedman, Hot, Flat, and Crowded (New York: Farrar, Straus and Giroux, 2008).

For more information, see CRS Report RL34099, California’s Waiver Request Under the Clean Air Act to Control

Greenhouse Gases From Motor Vehicles, by (name redacted) and (name redacted).

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At that time (late 1960s), the utility industry had no central research effort (the Electric Power

Research Institute (EPRI) was not started until 1972), and individual utilities devoted their

engineering efforts to improving mechanical efficiency of generation, not the chemical

engineering necessary for desulfurization. Many utilities also were opposed to adding a chemical

process on their plants, preferring other control techniques, such as tall stacks and low sulfur coal.

The success of the Government’s efforts is indicated by the fact that the FGD device is now the

performance and reliability standard by which new, emerging control devices are measured.16 The

federal government has also promoted the development of hybrid electric and fuel cell vehicles in

the United States through joint government-industry research and development aimed at the

introduction of high efficiency cars and trucks, as well as tax incentives for the purchase of new

advanced technology vehicles.17

The technological lens reflects a traditional American “can-do” faith in technology, and in the

country’s ability to find a “technology-fix” to meet the needs of most problems. Such an approach

attempts to increase the effectiveness of technology so that social problems can be solved at little

or no additional cost. Consumers’ desires and needs are taken as a given. The technological

response is an effort to achieve an acceptable level of environmental protection without unduly

restricting the choices available to those consumers. For example, consumers want to drive.

Viewed through the technological lens, policymakers see their role as making that activity less

environmentally harmful at minimal cost to consumers, not as restricting that desire or even

necessarily as offering alternatives to driving such as mass transit. Efforts to diminish consumer

use of the automobile would be seen as a last resort. The technological lens provides a view of the

economy in which technology permits consumers to continue their preferred behaviors while

concomitantly achieving environmental goals. It is not necessary for consumers to change their

behavior significantly to adjust to the “new reality” of an environmental problem.

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Viewed through the technological lens, global climate change is seen as a problem requiring a

reorientation of the energy sector from carbon-based fossil fuels to a more “environmentally

friendly” energy system based on renewables and conservation. As stated by Worldwatch

Institute:

The end of the fossil fuel age is now in sight. As the world lurches from one energy crisis to

another, fossil fuel dependence threatens at every turn to derail the global economy or disrupt

its environmental support systems. If we are to ensure a healthy and prosperous world for

future generations, only a few decades remain to redirect the energy economy.18

This view was reflected in a speech of President Clinton on April 21, 1993: the challenge of

global climate change “must be a clarion call, not for more bureaucracy or regulation or

unnecessary costs, but instead for American ingenuity and creativity, to produce the best and most

For a further discussion, see CRS Report RL34621, Capturing CO2 from Coal-Fired Power Plants: Challenges for a

Comprehensive Strategy, by (name redacted), (name redacted), and (name redacted).

See CRS Report R40168, Alternative Fuels and Advanced Technology Vehicles: Issues in Congress, by (name red

acted).

Christopher Flavin and Nicholas Lenssen, Beyond the Petroleum Age: Designing a Solar Economy (Washington

D.C.: Worldwatch Institute, December 1990), p. 5.

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energy-efficient technology.” The focus on technology was evident in the Clinton

Administration’s 1993 Climate Change Action Plan:

These [long-term] policies must address technologies of energy supply and use, and

condition markets for the long-term transition away from activities, fuels, and technologies

that generate large emissions of greenhouse gases.

The policies contained in the Action Plan are directed primarily at creating effective markets

for investments in existing or nearly commercially available technology that reduce

greenhouse gas emissions. The core of a long term strategy must ensure that a constant

stream of improved technology is available and that market conditions are favorable to their

adoption. The Action Plan is likely to stimulate a modest acceleration in technological

development.... Such gains will lay the foundation for the development of technologies that

could contribute to significant reductions in greenhouse gas emissions in both the United

States and abroad....

Research and development into the technologies that could contribute to greenhouse gas

emission reductions will be a critical part of the long term effort.19

These views were reiterated in President Clinton’s 1998 $6 billion Climate Change Technology

Initiative. As stated by then National Economic Council Chair Gene Sperling:

We think that this [Climate Change Initiative] package is a very good example of what we

spoke about when we said that there were win-win opportunities for positive incentives that

would clearly show how we can address the issue of climate change and strengthen our

economy at the same time.20

This “win-win” perspective on climate change policy also represented the core of the George W.

Bush Administration’s approach. The President stated that his alternative could “grow our

economy and, at the same time, through technologies, improve our environment.”21 In supporting

his new National Climate Change Technology Initiative, he stated:

America’s the leader in technology and innovation. We all believe technology offers great

promise to significantly reduce emissions—especially carbon capture, storage and

sequestration technologies.

So we’re creating the National Climate Change Technology Initiative to strengthen research

at universities and national labs, to enhance partnerships in applied research, to develop

improved technology for measuring and monitoring gross and net greenhouse gas emissions,

and to fund demonstration projects for cutting-edge technologies, such as bioreactors and

fuel cells.22

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

As reported in Daily Environment Report, “Administration Announces $6.3 Billion Plan of Spending, Tax Credits to

Curb Emissions,” February 2, 1998, p. AA-1.

Response to Questions by President George W. Bush at the National Security Agency’s Operations Center, Fort

Meade, Md (June 4, 2002). Reported in “Bush Defends Voluntary Policy to Slow Emissions Rather Than Mandating

Cuts,” Daily Environment Report (June 5, 2002) p. A-13.

Statement of President George W. Bush on Global Change (June 11, 2001) http://www.whitehouse.gov/news/

releases/2001/06/20010611-2.html.

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This technology focus also is the central element of the Asia-Pacific Partnership: “to facilitate the

development, diffusion, deployment, and transfer of existing, emerging and longer term costeffective, cleaner, more efficient technologies and practices among the Partners through concrete

and substantial cooperation so as to achieve practical results.”23

Looking through the technological lens, policymakers may see technological development as

cost-effective, thus improving the economy, not penalizing it. This “win-win” perspective

appeared clearly in the George W. Bush Administration’s 2002 Climate Action Report: “President

[George W.] Bush said last year [2001] that technology offers great promise to significantly and

cost-effectively reduce emissions in the long term. Our national circumstances—our prosperity

and our diversity—may shape our response to climate change, but our commitment to invest in

innovative technologies and research will ensure the success of our response.”24 According to

proponents, the cost of a technological approach to the climate change issue appears to net out to

zero, or even to save money, depending on how the benefits from increased efficiency are

estimated.

The technological lens tends to focus cost-benefit analysis on a “bottom-up” methodology that

evaluates the relative costs of projected compliance techniques. As summarized by National

Academy of Sciences, “technological costing develops estimates on the basis of a variety of

assumptions about the technical aspects, together with estimates—often no more than guesses—

of the costs of implementing the required technology.”25 Assumptions are technological, in terms

of technological performance; economic, in terms of cost-effectiveness; and behavioral, in terms

of penetration rates.

In the year 2000, DOE’s five National Laboratories—Oak Ridge, Lawrence Berkeley, Argonne,

National Renewable Energy, and Pacific Northwest—estimated the benefits of a technological

approach for reducing carbon emissions.26 The five laboratories analyzed scenarios for

technologies to reduce carbon emissions in a cost-effective manner (see Table 1). In discussing

their results, the National Laboratories concluded:

In both the Moderate and Advanced scenarios and in both timeframes (2010 and 2020), the

estimated annual energy bill savings exceed the sum of the annualized policy implementation

costs and the incremental technology investments. This finding is consistent with many

economic-engineering studies and with the views of many economists.27

Charter for the Asia-Pacific Partnership on Clean Development and Climate (January 12, 2006), “Purposes,” 2.1.1 at

http://www.asiapacificpartnership.org/.

Department of State, Climate Action Report: 2002 Submission of the United States of America Under the United

Nations Framework Convention on Climate Change, Department of State, November 2002, p. 5.

National Academy of Sciences, Policy Implications of Greenhouse Warming (Washington, DC: National Academy

Press, 1991), p. 48.

Interlaboratory Working Group, Scenarios for a Clean Energy Future, ORNL/CON-476, November 2000.

Ibid., p. 1.28.

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Table 1. Results of 2000 Interlaboratory Working Group Study

(Results for the year 2010)

Scenario

Direct Costs

Energy Savings

Carbon Savings

(billion 1997$)

(MtC)

$16.0

$41.5

$55.3

$89.2

85-90

230-332

Moderate Case

Advanced Cases

Source:

Interlaboratory Working Group, Scenarios for a Clean Energy Future, November 2000.

Such a conclusion raises the question: “If technological fixes such as enhanced energy efficiency

could actually save money, why aren’t people voluntarily doing it now?” One possible answer is

that the projections are wrong: the technological fixes are mirages, and the market has correctly

ignored them. An alternative answer, the one focused on by the technology lens, is that

widespread commercialization of these technologies is blocked by technological, economic, or

institutional barriers. For example, a barrier might be that the initial cost of an energy efficient

appliance is higher than a lower efficiency alternative, even though the lifetime cost is less; this

can be a barrier to a purchaser who is not aware of the comparative life time costs and/or who

cannot afford the upfront cost despite the long-term savings. An activist viewing the problem

through the technology lens would look to methods for overcoming that barrier, such as providing

information on lifetime costs and/or financial help.

Technology proponents tend to look favorably on governmental assistance in overcoming such

barriers. This assistance can include public sector research, development, and demonstration

efforts; incentives to private enterprise through direct funding, beneficial tax treatment for

research expenditures, and cost-sharing programs to help overcome technical barriers and to

improve the conditions for commercialization; governmental subsidies to technology; regulatory

interventions that create markets for new technologies; and regulations to address institutional

and market barriers, such as energy efficiency labeling requirements. Some of these incentives

(e.g., hybrid and fuel cell vehicles tax credits) were enacted as part of the Energy Policy Act of

2005, and increased energy-related research and development funding was authorized by the

Energy Independence and Security Act of 2007. A key issue in low-carbon technological

development has been volatile energy prices: while high energy prices create investment

opportunities in new technologies (e.g., solar and wind generation of electricity, alternative fuels

for autos), low prices diminish the attractiveness of those investment options. As discussed in the

next section, a carbon tax or cap-and-trade program could create a more positive long-term

investment climate for energy alternatives by establishing a predictable floor for prices of highcarbon energy sources.

The technology lens focuses attention on two basic issues: what drives technological

development, and what barriers impede it. From this perspective, government can help stimulate

the former and help remove the latter. For those who envision technological fixes that can achieve

environmental goals with minimal economic costs, governmental intervention may be a necessary

antidote to market failures and unnecessary barriers. But even for those who would rely primarily

on markets and minimize the role of government, the technological perspective is considered

optimistic, dynamic, and oriented toward the future.

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Viewing environmental issues through an economic lens focuses attention on markets, price

signals, and market imperfections. In this view, the recognition of environmental problems should

lead to adjustments in market signals, changing producers’ inputs and handling of wastes, as well

as the composition and level of consumer demand, so as to maximize net social welfare. Cleaning

the environment entails costs, which can be weighed against benefits.

The government’s role in this scenario is to ensure the correct market signals. To ensure correct

signals, the government can:

•

make consumers and producers aware of information on economic costs and

benefits;

•

adjust prices through taxes or fees; and

•

affect supply through tradeable permits for products (as with leaded gasoline in

the early 1980s) or for production-related emissions (as with sulfur dioxide

emissions), or through other market-oriented devices.

Viewed through the economic lens, the marketplace, with the correct signals, can operate to find

the optimal solution.

Economic considerations have been an explicit or implicit part of environmental policymaking

since environmental quality became a federal issue in the 1960s. The use of economic

mechanisms to implement environmental goals was debated in the 1960s and early 1970s, but

usually rejected on various grounds.28 Excluding economic considerations from environmental

protection proved difficult, however. As laws began to be implemented, economic costs became

increasingly consequential, although generally masked under “practical” or “feasibility”

concerns, as achievement of some environmental standards within specified deadlines proved

impossible. Automobile standards were delayed; ozone compliance was postponed; and other

issues were litigated. Economic concepts began to re-emerge in the debate over the environment

with the need to extend deadlines and to provide more flexibility to polluters to achieve mandated

standards.29

The preferred economic approach to environmental problems traditionally is the pollution tax.

Economists observe that pollution imposes costs on society that are not incorporated in the price

of the goods or services responsible for the pollution; these are called “external” costs. An ideal

pollution tax “internalizes” these external costs by making the beneficiary of the polluting activity

pay for the socially borne costs (polluter pays). As long as polluters find it cost-effective to

reduce their emissions to avoid paying the tax, they would add pollution controls until further

controls would have higher incremental costs than the tax. Likewise, innovators would be

encouraged to develop new technology that reduce emissions at a cost less than the pollution tax.

See, for example, Steven Kelman, What Price Incentives: Economists and the Environment (Boston: Auburn

Publishing Co., 1981).

For background, see CRS Report 94-213, Market-Based Environmental Management: Issues in Implementation, by

(name redacted) et al.

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When the tax is set at the level at which the marginal costs of more control would equal the

marginal benefits society gains by future reductions, society’s net welfare is maximized.

Despite the theoretical benefits of the pollution tax methodology, environmental taxes have

received limited practical use in the United States, for technical as well as political reasons.30

There are no existing U.S. models of an emissions tax, although five European countries (Finland,

the Netherlands, Sweden, Denmark, and Norway) have carbon-based taxes. The closest U.S.

example is a tax on chemicals that deplete stratospheric ozone. 31

With the economists’ favor for pollution taxes not gaining policymakers’ adherence, attention

shifted to other economic mechanisms to increase polluters’ flexibility in achieving

environmental standards based upon regulation. Unlike a tax that focuses on the price (demand)

for a pollutant, these mechanisms focus on the quantity (supply) of the pollutant permitted.

The tradeable allowance system for sulfur dioxide control in the acid rain program (Title IV of the

Clean Air Act Amendments of 1990) represented a significant step in the evolution of economic

mechanisms. Commonly called a “cap- and-trade” system, the acid rain control program’s success

has led to calls for use of a similar system with other pollutants, including carbon dioxide.32

A cap-and-trade program like Title IV’s is based on two premises. First, a set amount of a

pollutant, such as SO2, emitted by human activities can be assimilated by the ecological system

without undue harm. Thus the goal of the program is to put a ceiling, or cap, on the total

emissions of the pollutant rather than limit ambient concentrations. Second, a market in pollution

rights between polluters is the most cost-effective means of achieving a given reduction. This

market in pollution rights (or allowances, each of which in the acid rain program is equal to one

ton of SO2) is designed so that owners of allowances can trade those allowances with other

emitters who need them or retain (bank) them for future use or sale. Thus the allowance has value

and hence becomes, in effect, the price of emitting sulfur.

While market-based mechanisms such as cap and trade are sometimes regarded as the private

market’s alternative to a regulatory command-and-control program, the interactions are more

complex. The so-called “market for pollution rights” would not exist if not for a governmental

role in altering what the market would do in the absence of governmental action. If governmental

regulations did not restrict SO2 emissions, there would be no need for SO2 allowances.

Government creates the market and defines the boundaries of acceptable market responses. Under

the SO2 trading program, facilities may buy allowances to meet necessary reductions instead of

installing equipment to control pollution.33 The choice depends on cost.

Steven Kelman, What Price Incentives: Economists and the Environment (Boston: Auburn Publishing Co., 1981).

To facilitate the phaseout of ozone-depleting chemicals (required under the Montreal Protocol and subsequent

amendments), the United States imposed a tax on the production or importation of certain chemicals (including

chlorofluorocarbons, or CFCs) in 1990. This tax was designed to supplement the allowance trading program that the

EPA had designed to implement the international agreements. Also, inventories of certain CFCs held on January 1 of

each year are subjected to a “floor stocks tax.”

See CRS Report RL33799, Climate Change: Design Approaches for a Greenhouse Gas Reduction Program, by

(name redacted).

However, emissions may not cause ambient levels to exceed the National Ambient Air Quality Standard for SO2

regardless of how many allowances the owners of emitting facilities hold.

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By allowing polluters to choose their lowest cost abatement actions, implementing environmental

goals through market mechanisms represents a general elevation of economic “efficiency” as the

sine qua non of decision-making. Pragmatically achieving this efficiency presumes substantially

complete knowledge by producers and consumers of costs, abatement alternatives, and product

substitutions as well as substantial flexibility in achieving compliance. The market approach

simultaneously maintains the general principle of “polluter pays” as the underlying ethical

rationale for the distribution of costs among parties. Through the market, the “polluter who pays”

includes not only the producer, but also labor, stockholders, and the consumer (who demands the

product and who pays somewhat more for the embedded costs to control pollution).

Those viewing environmental policy through the economic lens generally presume that

governmental interference, whether through subsidies or regulation, should be minimal. In reality,

the distribution of impacts through the market often leads to calls for political interventions that

compromise efficiency and the “polluter pays” principle. The political process tends to weigh

relevant differences between various groups affected by an environmental mandate, and special

treatment may be deemed necessary to promote justice or fairness. For example, the sulfur

dioxide allowance system contains numerous “special” allocations of allowances to various

groups that argued for special consideration due to past, current, or future situations. These

special allocations represent subsidies to these groups that a strict “polluter-pays” principle would

not allow. Thus the “polluter-pays” principle is not a distributional principle that policymakers

will necessarily treat independently of other concerns and criteria.

The economic lens reflects a traditional American belief in individual choice and private

markets—given the correct price signals, producers and consumers will adjust their behavior

accordingly. This adjustment will be done in the most cost-efficient manner, and with a minimum

of governmental involvement. Consumers’ desires are seen as responsive to price. The issue then

is for the price to reflect the costs of relevant externalities. With the right price, supply and

demand will find the level that maximizes social welfare.34 Policymakers using the economic lens

see consumers and producers adjusting their behaviors to the “new reality” of an environmental

problem by responding to the price signals that take into account a particular environmental

goal. But this approach creates clear winners and losers in terms of who will profit and who will

pay the tab. As a result, policymakers adjust governmental intervention to achieve change at a

pace and impact that are socially and politically acceptable.

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The economic lens focuses policymakers on market-based approaches to address global climate

change; these include marketable permit (allowance) programs and various taxes, fees, and

rebates, as well as research and development, education, and market-related information. Current

proposals for controlling carbon dioxide and other greenhouse gas emissions center on either

marketable permits programs (loosely based on the current sulfur dioxide program) or on a

carbon tax.35 Meanwhile, the members of the European Union, in addressing their obligations

As American Enterprise Institute scholar Kenneth P. Green says, “The right thing to do is to ... tax the environmental

harms that energy demonstrably creates and let the market sort it out.” “The Best Policy on Subsidies Is to Simply

Ditch Them” AEI Short Publications, posted January 29, 2007 at http://www.aei.org/publications/pubID.25532/

pub_detail.asp.

See CRS Report RL33799, Climate Change: Design Approaches for a Greenhouse Gas Reduction Program, by (name

redacted).

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under the Kyoto Protocol, have established a CO2 trading program that covers about half their

total CO2 emissions.36 In addition, Finland, the Netherlands, Sweden, Denmark, and Norway have

imposed carbon taxes.

Debate in the United States about implementing carbon reductions has focused on tradeable

permits, as manifested by numerous bills introduced in the U.S. Congress (e.g., S. 2191 in the

110th Congress)—though occasionally a voice for carbon taxes is heard.37 The inclusion of

domestic and international emissions trading systems and international joint implementation

programs to implement any emission reduction requirements were a key element of the Clinton

Administration’s negotiating position at Kyoto. While rejecting the Kyoto Protocol, the George

W. Bush Administration’s Climate Change Initiative acknowledged the potential use for trading

programs to address climate change. The Initiative directed the Secretary of Energy to

recommend ways to ensure that entities that register reductions under current voluntary initiatives

were not penalized under a future climate policy, and to give transferable credits to companies

that achieve real reductions. In addition, the Administration stated: “If, in 2012, we find that we

are not on track toward meeting our goal, and sound science justifies further policy action, the

United States will respond with additional measures that may include a broad, market-based

program....”38

Numerous bills have been introduced in Congress to mandate substantial reductions in CO2

emissions implemented through a nationwide tradeable permit program, and twice the Senate has

voted on proposals. In the 108th Congress, S. 139, which would have imposed a mandatory capand-trade greenhouse gas reduction program, failed in 2003 on a 43-55 vote. In 2005, a similar

initiative was considered as an amendment during the Senate debate on the Energy Policy Act of

2005 and defeated on a 38-60 vote. These proposals would have capped U.S. greenhouse gas

emissions, with the cap being implemented through a tradeable permit program to encourage

efficient reductions. Although these initiatives failed, 13 Senators introduced S.Amdt. 866 during

the debate on the Energy Policy Act of 2005; it stated that it is the Sense of the Senate that the

Congress should enact a comprehensive and effective national program of mandatory, marketbased limits and incentives on greenhouse gases that slow, stop, and reverse the growth of such

emissions. The resolution passed by voice vote after a motion to table it failed on a 43-54 vote.

Subsequently, in the 110th Congress, the Environment and Public Works Committee approved S.

2191, to establish a cap-and-trade system for greenhouse gas emissions, as amended, on

December 5, 2007, by a vote of 11-8. The bill was reported (S.Rept. 110-337) May 20, 2008, and

Senate debate on a modified version of the bill (S. 3036) began June 2. A motion to invoke

cloture failed, however, June 6, on a vote of 48-36.

The generally acclaimed success of the sulfur dioxide program notwithstanding, it may not

translate easily to a marketable permit program for carbon dioxide. Fundamental differences

exist: for example, the acid rain program involves over 2,000 new and existing electric generating

facilities that contribute two-thirds of the country’s sulfur dioxide and one-third of its nitrogen

oxide emissions (the two primary precursors of acid rain). This concentration of sources makes

See CRS Report RL34150, Climate Change and the EU Emissions Trading Scheme (ETS): Kyoto and Beyond, by

(name redacted).

Anne Applebaum, “Global Warming’s Simple Remedy,” The Washington Post (February 6, 2007), p. A17.

White House, Global Climate Change Policy Book, February 2002. Available at http://www.whitehouse.gov/news/

releases/2002/02/climatechange.html.

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the logistics of allowance trading administratively manageable and enforceable. However, carbon

dioxide emission sources are not so concentrated. Although over 95% of the CO2 generated from

human activities comes from fossil fuel combustion, only about 40% comes from generating

electricity. Transportation accounts for about 33%, direct residential and commercial use for

about 12%, and direct industrial use for about 15%. Small dispersed sources in transportation,

residential/commercial, and the industrial sectors are far more important in controlling CO2

emissions than they are in controlling SO2 emissions. This would create significant problems in

administering and enforcing a tradeable permit program that attempts to be comprehensive or

equitable.39 These concerns multiply as the global nature of the climate change issue is

considered, along with other potential greenhouse gases, such as methane and nitrous oxide.40

In the view of most economists, a carbon tax would be the most efficient approach to controlling

CO2 emissions.41 The approach is generally conceived as a levy on natural gas, petroleum, and

coal according to their carbon content, in the approximate ratio of 0.6 to 0.8 to 1.0, respectively.

With the millions of emitters involved in controlling CO2, the advantages of a tax are self-evident.

Imposed on an input basis, administrative burdens such as stack monitoring to determine

compliance would be reduced. Also, a carbon tax would have the broad effect across the economy

that some feel is necessary to achieve long-term reductions in emissions.

In other ways, a tax system merely changes the forum, rather than the substance of the policy

debate. Because paying an emissions tax becomes an alternative to controlling emissions, the

debate over the amount of reductions necessarily becomes a debate over the level of tax imposed.

Those wanting large reductions quickly would want a high tax imposed over a short period of

time. Those more concerned with the potential economic burden of a carbon tax would want a

low tax imposed at a later time with possible exceptions for various events. Taxing emissions

basically would remain an implementation strategy; policy determinations such as tax levels

would require political/regulatory decisions. Also, a tax would raise revenues; the disposition of

these revenues would significantly affect the economic and distributional impacts of the tax.

The difficulties in crafting a carbon tax or a multi-national trading program should not be

underestimated. With the 1997 Kyoto Protocol now in force, many countries that ratified the

protocol have developed appropriate implementation strategies to begin reducing their emissions

of greenhouse gases. In particular, the European Union (EU) decided to establish an emission

trading scheme as a cornerstone of its efforts to meet its obligation under the Kyoto Protocol. In

deciding on this scheme, the European Commission (EC) adopted an initial “learning-by doing”

trial period (2005-2007) to prepare the EU for Kyoto Protocol’s emissions limitations that began

in 2008. This first phase of the program had a series of problems, including over-allocation of

allowances, thin trading volumes, and other issues that resulted in a very volatile market. From a

high of about 30 euro per allowance in 2005, the allowance price dropped to less than 1 euro by

mid-2007. The 2008-2012 Kyoto compliance phase of the European Trading System has been

adjusted to address some of the problems identified in the first phase, resulting in a more stable

On distributional effects of carbon trading, see Congressional Budget Office, Who Gains and Who Pays Under

Carbon-Allowance Trading? The Distributional Effects of Alternative Policy Designs, June 2000.

For a discussion of the emerging international market for greenhouse gas credits, see Richard Rosenzweig, Matthew

Varilek, and Josef Janssen, The Emerging International Greenhouse Gas Market, Pew Center on Global Climate

Change, March 2002.

“It is an open and shut case that the most economic way to constrain carbon dioxide (CO2) emissions is a flat-rate tax

based on the carbon content of fuels—across the board, no exceptions.” David Cope, “Environment, Economics and

Science,” UK CEED Bulletin, No. 53 (Spring 1998), 18.

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and mature market system.42 More improvements are planned for the next phase beginning in

2013.

The choice between a tradeable permit approach and a tax approach depends in part on one’s

sensitivity to the uncertainty in the benefits of reductions in greenhouse gases versus the

uncertainty in the costs of the program. Those confident of the benefits to be received from

reducing greenhouse gases tend to focus on the quantity of pollutants emitted and to argue for a

specific, mandated emission level. For example, the Kyoto agreement mandates a specific

allowable emission level based on a historical baseline (1990/1995, depending on the gas) for a

specific compliance period (2008-2012). While a ceiling is placed on emissions, no ceiling is

placed on control costs. Implementing such a reduction program through a market-based scheme,

such as a tradeable permit program, would probably assure that the costs would be dealt with

efficiently through the marketplace; however, those costs are not capped. This is the approach

used under the current SO2 control program. After a decade, results indicate that control costs

under the SO2 program are considerably less than they would have been under an alternative

“command and control” scheme. However, there is no lid on the costs, which may rise in the

future as growth in electricity generation pushes against the cap on emissions.

Alternatively, a tax in effect places a ceiling on control costs, although the actual reductions

achieved are subject to some uncertainty. For example, if a carbon tax of $100 a ton were levied,

no polluter would pay more than $100 a ton to reduce carbon emissions. Thus, under worst-case

conditions, the program costs would be $100 a ton. However, the actual reductions that such a tax

might achieve would have to be estimated, based on economic simulations or actual monitoring.

Reductions would not be guaranteed as any polluter could choose to pay the tax rather than to

reduce emissions. Reductions could also vary over time as new technology or other events raise

or lower the cost of reducing emissions.

A carbon tax or tradeable permit program would affect economic behavior in at least three ways:

(1) effectively reduce real income through higher prices and therefore reduce overall consumption

of goods (particularly in the short-term); (2) encourage manufacturers and consumers to substitute

less carbon-intensive (or carbon free) energy sources for current carbon-intensive (i.e., fossil fuel)

energy sources; and (3) encourage research and development of innovative, less carbon intensive

or more energy efficient technologies and their penetration into the marketplace. The ability and

efficiency of the economy in making these adjustments over a specified period of time would

largely determine the impact of a market-induced rise in the costs of energy generated from fossil

fuels either through a carbon tax or a marketable permit program.

Depending on the reduction achieved and the model employed, annual gross domestic product

(GDP) losses resulting from carbon control are estimated to range from less than 1% to more than

4%, with most falling into a range of 1% to 3%. If a carbon tax were chosen, that tax would

generate revenues—revenues sufficiently large to affect aggregate consumer demand. It is the

contractionary pressure of these tax revenues that the Congressional Budget Office (CBO) cites

as the major reason for a projected loss of 2% in U.S. GDP from a $100 per ton carbon tax phased

in over 10 years.43 The disposition of those tax revenues would greatly affect the impact of the

For more information, see CRS Report RL34150, Climate Change and the EU Emissions Trading Scheme (ETS):

Kyoto and Beyond, by (name redacted).

Congressional Budget Office, Carbon Charges as a Response to Global Warming: The Effects of Taxing Fossil Fuels

(August 1990), pp. 35-37.

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carbon tax on the economy. Thus the impact of a carbon tax on the economy would depend on a

combination of policies beyond just the level of the tax.

The tax level necessary to achieve a given reduction is also subject to a wide range of estimates.

The Stanford Energy Modeling Forum compared 13 models under a series of control scenarios

with common assumptions (where possible), including one that would have stabilized carbon

emissions at 1990 levels by the year 2000.44 About half of the models studied estimated the

carbon tax necessary to meet the stabilization target in the year 2000 to be about $30 per ton or

less, while the other half estimated the necessary carbon tax to be about $100 or more. Further

studies by the Stanford Energy Modeling Forum on the cost to comply with the Kyoto Protocol,

and on the global compliance cost of various stabilization scenarios, resulted in a similarly wide

range of estimated tax levels.45

Because the problem of greenhouse gas emissions is seen in terms of internalizing a currently

external cost, the economic lens implies that the marketplace is the most efficient means of

controlling undesirable pollutants. The private sector can solve the problem if given sufficient

incentive with minimal governmental interference. The Government’s role primarily consists of

providing a market-based signal to private industry about the external cost (e.g., emission taxes,

tradeable permits, etc.). In reality, the Government’s role is more involved. For taxes, this

includes determining the tax level, any phasing-in period, escalation, and recycling of revenues

received. For permits, this includes the total numbers of permits allowed, initial allocation

formulas, any phasing in period, penalties, transaction procedures, and tax liability. While an

economic approach would supplement the policy process in implementing a greenhouse gas

reduction program, it would not be a substitute for basic policy decisions and oversight.

A limited or supporting governmental role is consistent with the overall perspective of the

economic lens: private initiative, economic cost-effectiveness, concern about impact of

environmental policy on economic policy, cost aversion, and reliance on market forces.

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The development of environmental protection as a national policy concern has reflected three

factors: (1) the development of an environmental consciousness among the electorate, (2) a

change in the climate of decision-making among individuals, businesses, and government at all

levels, (3) the availability of opportunities to make concrete decisions based on environmental

grounds (either in addition to or in opposition to other criteria, including economic ones).

The underlying basis of an environmental consciousness is an understanding of the

interconnectedness of the planet’s biological processes, and a recognition that changes caused by

Energy Information Administration, Energy Modeling Forum Study 12—Global Climate Change: Energy Sector

Impact of Greenhouse Gas Control Strategies. Response to request by the House Committee on Energy and Commerce

(May 4, 1992).

On Kyoto Protocol compliance costs, see John Weyant and Jennifer Hill, “Introduction and Overview,” The Energy

Journal, (Special Issue, 1999), pp. vii-xliv; on global compliance costs of various stabilization scenarios, see John P.

Weyant, Francisco C. de la Chesnaye, and Geoff J. Blanford, “Overview of EMF-21: Multigas Mitigation and Climate

Policy,” The Energy Journal (Special Issue, 2006), pp. 1-32.

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humans may have ecological effects beyond those intended or foreseen. From this perspective, it

is in humanity’s self-interest (as well as in the interests of non-human life) to protect the basic

biological processes that are the foundation of all life; humans can protect those processes by

being conscious of humanity’s environmental impact and by avoiding or mitigating that impact to

the greatest extent necessary (accepting that some impact is unavoidable, and that ecological

science has a crucial role in discovering the effects of human activities).

A seminal characterization of the ecological perspective is A Sand County Almanac, by Aldo

Leopold.46 He suggested that humankind has developed two ethical dimensions—the first dealing

with the relation between individuals and the second with the relation between the individual and

society. But, said Leopold:

There is as yet no ethic dealing with man’s relation to land and to the animals and plants

which grow upon it.... The extension of ethics to this third element in human environment is,

if I read the evidence correctly, an evolutionary possibility and an ecological necessity.47

Describing the need for an “ecological conscience,” Leopold concluded that the environmental

problem “is one of attitudes and implements”; the development of a “land ethic” requires “an

internal change in our intellectual emphasis, loyalties, affections, and convictions.”48

The challenge of the ecological approach was given global scope by the “Brundtland Report” of

the World Commission on Environment and Development. Articulating the goal of “sustainable

development,” its forward described the challenge this way:

If we do not succeed in putting our message of urgency through to today’s parents and

decision makers, we risk undermining our children’s fundamental right to a healthy, lifeenhancing environment. Unless we are able to translate our words into a language that can

reach the minds and hearts of people young and old, we shall not be able to undertake the

extensive social changes needed to correct the course of development.

.... We call for a common endeavor and for new norms of behavior at all levels and in the

interests of all. The changes in attitudes, in social values, and in aspirations that the report

urges will depend on vast campaigns of education, debate, and public participation.49

The idea of “sustainable development” suggests future generations should enjoy the same

opportunities for meaningful and fulfilling lives as the current generation. A sustainable society

has been defined as “one that satisfies its needs without jeopardizing the prospects of future

generations.”50 The concept thus serves as an umbrella to encourage development of renewable

resources and conservation of non-renewable resources.51

Aldo Leopold, A Sand County Almanac, with Essays on Conservation from Round River (New York: Ballantine

Books, 1970), pp. 237-264.

Ibid., p. 239.

Ibid., pp. 263, 246. Some, viewing global climate change through the ecological lens, see in the long-term risks an

indictment of the lifestyle and economic structure of Western society—a viewpoint profoundly disturbing to others

who do not look through the same lens. As noted by Leopold, an environmental ethic imposes new obligations, calls for

sacrifice, and changes existing values.

Our Common Future (New York: Oxford University Press, 1987), p. xiv.

Lester R. Brown, et al. State of the World, 1990 (New York: W.W. Norton & Company, 1990), p. 171.

See, for example, Richard B. Norgaard and Richard B. Howarth, “Climate Rights of Future Generations, Economic

Analysis, and the Policy Process,” in U.S. Congress, House, Committee on Science, Space, and Technology,

(continued...)

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The emergence of the ecological perspective (or the “land ethic” or “sustainable development”) is

manifest in new values and practices of individuals, businesses, and Government.

Within the federal government, the National Environmental Policy Act of 1969 represented a

watershed in establishing the principle that major federal decisions should publically disclose and

take into account environmental impacts. Originally resisted by many agencies, the idea of

assessing the environmental consequences of decisions through “Environmental Impact

Statements” has now become routine. Also, over the past two decades, the federal government

has taken steps to foster public awareness of environmental values through support for

environmental education. In addition, the federal government has used procurement policies to

support environmental goals; for example, by requiring purchases of paper of specified recycling

content and authorizing payment of a premium for it, and has revised statutes to make federal

facilities subject to these requirements.

The change in societal values resulting from an increased ecological consciousness also affects

the perspectives of corporate decision-makers. Despite the often confrontational relationship

between federal environmental policymakers and industry, a consequence often attributable to the

command-and-control regulatory approach to environmental policy, industry itself has

increasingly recognized that community environmental values are part of the social milieu in

which industrial production occurs.

A 1994 article in the chemical industry publication Chemical Week reviewed the industry’s

perceptions of pollution control. It noted that, in the early 1970s, most corporations viewed

environmental management as a “threat” and that pollution control expenditures were

“nonrecoverable investments.”52 The article observed that, in 1970, “economist Milton Friedman

described the actions of any company making pollution control expenditures beyond that

‘required by law in order to contribute to the social objective of improving the environment’ as

‘pure and unadulterated socialism’.” In contrast, the article said that major corporations currently

are espousing the benefits of proactive environmental management, stewardship, and

environmental leadership. The chemical industry, which was suffering from poor public

perceptions, particularly after the Bhopal incident, was at the forefront of this shift, as indicated

by remarks of Robert Luft, Senior Vice President of Du Pont Chemicals: “Our continued

existence requires that we excel in safety and environmental performance.... We must shift our

mindset from ‘meeting regulations’ to ‘meeting public expectations’.”53

This new attitude, or climate, of decision-making is providing many businesses and individuals

with new alternatives and opportunities to choose environmentally preferred options either in

concert with more traditionally based economic criteria or in opposition to such “self-interest”based criteria. For example, the chemical industry today sponsors an international “Responsible

Care” campaign54; and prodded by environmental groups and EPA, the American Chemistry

(...continued)

Technologies and Strategies for Addressing Global Climate Change, Hearings, 17 July 1991 (Washington, D.C.: U.S.

Govt. Print. Off., 1992), pp. 160-173.

“34 Years of Environmental Strategy,” Chemical Week (August 24, 1994), 27.

Robert v.d. Luft, “Protecting the Environment: It’s Good Business,” Remarks, at the National Petroleum Refiners

Association International Conference, San Antonio, Texas (March 26, 1991), p. 9.

See http://www.responsiblecare.org/ and, domestically, http://www.americanchemistry.com/s_acc/index.asp.

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Council (ACC) has committed the industry to testing of high-use chemicals.55 An independent but

related ACC initiative is the Green Chemistry Institute, a nonprofit organization with the mission

of promoting pollution prevention using “economically sustainable clean production

technologies.”56 In addition, EPA and the American Chemical Society jointly sponsor annual

“Green Chemistry Challenge Awards” to recognize pollution prevention through innovative

chemistry; the first Green Chemistry Award was presented in 1996.

Individuals, as consumers and citizens, are also exercising options to express an environmental

consciousness that extends beyond immediate economic self-interest. Consumers’ responses to

such environmental problems as solid waste disposal indicate that individual behavior and

community programs can and will reflect environmental values. For example, recycling programs

have increased in recent years, despite questionable economics and the significant consumer

inconveniences involved. Such a trend suggests the power of aesthetics and the perceived

intrinsic value of the environment as a force which influences people’s preferences and priorities.

Likewise, driven by public demand, several states offer electricity consumers the opportunity to

purchase “green power” (i.e., electricity produced from renewable energy and other low-polluting

sources), rather than power produced from conventional, more polluting sources.57

The ecological lens magnifies elements that are psychological, philosophical, and theological.58 A

policy decision to address a pollution problem generally involves a sophisticated and sometimes

lengthy educational process of which economics and technological availability are only

components. In this view, environmental education, Smokey the Bear, and environmental interest

groups from the Audubon Society to Greenpeace to Population Connection represent efforts to

inculcate the sense of moral obligation toward the environment—to acculturate people to the

importance of the environment as essential to long-term human health and welfare. Such efforts

can promote a climate of opinion in which environmentally responsible decisions are socially

endorsed and environmentally irresponsible decisions are stigmatized as not socially acceptable.

Pollution protection gets on the national agenda not on the basis of affordability or whether

control technology exists, but because an environmental problem is recognized as a threat to

human health or welfare. The ecological approach views the problem of environmental policy

implementation to be the moral education of individuals and institutions to the dimensions of the

ecological crisis, changing the climate in which decisions are made, and providing opportunities

for individuals and institutions to make decisions based on ecological concerns, rather than

having those choices limited to alternatives dictated solely by economic criteria.

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One could argue that global climate change is the quintessential issue for an ecological lens, as it

so clearly involves far-reaching dimensions including the standing of future generations, nonhuman life, and distributional justice around the globe. The ecological lens provides a decision

criterion in the face of uncertainty or of competing preferences. Aldo Leopold observed that the

land ethic “may be regarded as a mode of guidance for meeting ecological situations so new or

See http://www.uslri.org/ and http://www.epa.gov/chemrtk/.

See http://chemistry.org/greenchemistryinstitute.

For more information on green electricity markets, see the DOE website at http://www.eere.energy.gov/greenpower/

markets/index.shtml.

Leopold noted that Ezekiel and Isaiah decried the despoliation of the land.

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intricate, or involving such deferred reactions, that the path of social expediency is not discernible

to the average individual.”59 No situation is better described as “so new and intricate” or as

having “such deferred reactions” than global climate change.

An ecological perspective on global climate change focuses attention on an enlightened public to

implement stewardship through a changed value system. Numerous international and domestic

entities are supporting activities to foster governmental, corporate, and public awareness of the

global climate change issue and to encourage remedial actions. (Other entities provide “neutral”

information and analysis on the issue, and still others actively lobby against the viewpoint that

action is justified at this time.) These organizations support activities that translate into concrete

actions through a variety of mechanisms, including voluntary programs for businesses and

alternative “green” options that allow for individual consumers to make ecologically responsible

decisions even when they cost more than do traditional choices.

The current umbrella for activities to foster action is the U.N. Framework Convention on Climate

Change, under which a range of activities, from research and development to education, are

sponsored. Manifesting the ecological perspective, the Framework Convention defines the

signatories’ objective to be the protection of ecosystems from “dangerous anthropogenic

interference with the climate system ... to allow ecosystems to adapt naturally to climate change,

to ensure that food production is not threatened and to enable economic development to proceed

in a sustainable manner.”60 Economic and human concerns are seen as interdependent with

ecological processes. The potential policy agenda could include virtually all human endeavors

and relationships, from industrial policy to North-South equity, from population policy to energy

policy, from domestic concerns to the restructuring of international institutions.

From the ecological perspective, achieving such a broad policy agenda would require an active

federal governmental role that involves educating the citizenry about the need to act on the risk of

global climate change, providing the public with a role model in terms of government’s own

decisions and priorities, and developing opportunities for individuals to make ecologically

responsible decisions even if those decisions are not economic in a traditional sense. The federal

role has included four kinds of activities that reflect environmental stewardship.

•

First, making decisions that take into account potential consequences for global

climate change and taking actions that support and promote environmentally

“friendly” products or processes (for example, through procurement policies or

through product labeling).

•

Second, internationally exploring the possibilities of achieving consensus on

further greenhouse gas emissions reductions and on inter-related economic and

human issues.

•

Third, supporting education of the public on environmental concerns generally

and about global climate change specifically, and fostering the inculcation of

environmental values in educational programs.

•

Fourth, fostering mechanisms that permit the public to express their

environmental values in everyday decision-making.

Leopold, p. 239.

United Nations Framework Convention on Climate Change, article 2. The United States is a Party to the Framework

Convention on Climate Change.

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Similar activities are being promoted through various corporate and nonprofit initiatives, as well.

For example, a 1998 corporate initiative under the auspices of The Pew Center On Global

Climate Change61 was created to engage business in developing efficient, effective solutions to

the climate problem. Accepting “the views of most scientists that enough is known about the

science and environmental impacts of climate change for us to take actions to address its

consequences,” the Center believes “businesses can and should take concrete steps now in the

U.S. and abroad to assess their opportunities for emission reductions, establish and meet their

emission reduction objectives, and invest in new, more efficient products, practices and

technologies.” Besides this commitment to stewardship, “major companies and other

organizations are working together through the Center to educate the public on the risks,

challenges and solutions to climate change”; undertaking “studies and policy analyses that will

add new facts and perspectives to the climate change debate in key areas such as economic and

environmental impacts, and equity issues”; and engaging in an international effort designed to

increase the global understanding of market mechanisms, and to work with developing countries

to assess emission reduction opportunities.”

The ecological perspective emerges from individual actions both in terms of support for

educational endeavors—as in support for environmental interest groups—as well as through

market choices based on ecological impacts rather than on pure economic costs. Indeed, these

actions can go against prevailing economic or technological trends. For example, people may

choose to pay more for a product or a service because it is perceived as being more “green” or

“climate friendly” than alternatives based on traditional economic or technological

considerations. In a sense, customer preferences can outrun the marketplace by creating a demand

for a product that producers did not anticipate. In such cases, economic and technological

mechanisms follow the ecological imperative, rather than defining limits to it. As noted earlier,

some states now offer consumers a “green electricity” alternative to conventionally produced

electricity in response to consumer demand.

Many actions to reduce emissions of greenhouse gases can serve multiple social ends—such as

energy conservation and pollution prevention that are thought to improve the economic efficiency

with which human needs are met. Governments and corporations have taken a lead in fostering

energy conservation and efficiency in use, particularly in developed countries. In the U.S., EPA

and DOE sponsor a range of energy efficiency programs under the rubric, “Energy Star,” to

promote energy-efficient lighting, buildings, and office equipment.62 DOE funds research and

demonstration, pursuing energy efficiency in transportation, industry, utility, and buildings

sectors.63 There is also an Alliance to Save Energy, a nonprofit coalition of prominent business,

government, environmental, and consumer leaders who promote the efficient and clean use of

energy worldwide, arguing benefits for the environment, the economy, and national security.64

The efforts are spearheaded by the Center’s Business Environmental Leadership Council with 44 member

companies, including Alcoa, American Electric Power, Bank of America, Boeing Company, BP, Duke Energy, Exelon,

GE, Georgia-Pacific, IBM, Intel, Lockheed Martin, Sunoco, Toyota, United Technologies, Whirlpool Corporation. The

quotations in this paragraph are from the Pew Center on Global Climate Change’s website, at

http://www.pewclimate.org/companies_leading_the_way_belc

See http://www.energystar.gov/.

See CRS Report RL33599, Energy Efficiency Policy: Budget, Electricity Conservation, and Fuel Conservation

Issues, by (name redacted).

For more information, see http://www.ase.org.

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While technological in thrust, these EPA and DOE activities involve educating and informing

prospective consumers to persuade them not only of potential cost savings but also of social

benefits to be gained. Thus technology (and markets) can be the tool for meeting the “moral

imperative” associated with by the ecological perspective.65 Internationally, the George W. Bush

Administration’s Asia-Pacific Partnership on Clean Development and Climate has parallels. It

involves encouraging the partners, including the developing China, India, and South Korea, to

adopt more sustainable environmental policies, especially in using energy sources and

technologies that constrain greenhouse gas emissions.

Similarly, government and corporate initiatives for pollution prevention, through, for example,

source reduction and product stewardship, foster systemic changes that have the potential to

reduce global climate change risks. EPA estimates that its WasteWise program—a voluntary

partnership between EPA and businesses to prevent waste, recycle, and buy and manufacture

products with recycled materials—reduced greenhouse gas emissions by more than 22.1 million

metric tons of carbon dioxide equivalent in 2007.66

Thus, from the ecological perspective, with a public more aware of the problem of global climate

change and with the availability of relevant technological and/or economic alternatives, the

implementation of the broader agenda through appropriate measures becomes possible: making

available options that permit people to exercise their moral obligation.

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Each of the three lenses implies fundamentally different ways of assessing policy actions to

address global climate change. Crucial variations emerge in perspectives on cost analysis,

scientific uncertainty, and the role of government.

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The technological lens focuses attention on the outcome of the innovation; actions are justified if

they resolve the pollution problem, and costs and benefits should be weighed in terms of the

outcome, not in terms of the transitional costs. In contrast, those viewing the issue through the

economic lens tend to focus on costs and benefits as the critical metric for evaluating policies;

actions are justified when the benefits outweigh the costs, but not otherwise. The ecological

perspective basically suggests that policy choices can be based on a recognition of “rights” rather

than costs and benefits; the principles of protecting life and of preserving the ecosystem for future

generations govern choices.

These differing viewpoints have implications for the timing and focus of invested resources.

Looking through the technological lens, a policymaker would focus on investing resources

directly in technical options. Some investment in understanding the problem may be necessary to

delineate technical options, but new technologies may make extensive research in understanding

the problem moot (as when a process change eliminates use of a chemical of concern). Looking

However, some “deep ecologists” reject technological fixes and the use of market mechanisms on the grounds that

they merely further a nonsustainable system that needs to be replaced.

Personal communication, Jennifer Brady, EPA Waste Wise program, November 25, 2008.

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through the economic lens, a policymaker would typically first invest resources in understanding

the problem and the costs and benefits of alternatives. That assessment would reveal whether

society would be better off adopting policies and committing resources to action (e.g., to reduce

carbon dioxide emissions). Looking through the ecological lens, a policymaker who perceives a

risk to health and/or ecological systems would tend to promote immediate action. Investments in

understanding the problem and the costs and benefits would be undertaken only to the extent

appropriate to ensure cost-effectiveness of those actions. Because the ecological lens portrays

benefits largely in non-economic terms (sustainability, equity), efforts to quantify and monetize

those benefits may be viewed as inappropriate—even immoral. Instead, people are provided with

alternatives to act on the problem, allowing them to choose a “responsible” option, even if it costs

more than a traditionally defined “economic” option.

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Those using the technological lens see it as a “far-sighted,” economically justifiable approach to

global climate change. Technology is seen as the impetus for improved efficiency in the economy,

concomitant with improved environmental protection. Although the development of technology

may be encouraged for a variety of reasons, its commercialization is ultimately based on costeffectiveness. In terms of the substance of the environmental issue, the user of the technological

lens is typically agnostic or indifferent. The current economic system is viewed as inefficient

since it does not consider decisions on a “life-cycle” basis. When considered on this broader

perspective, reductions in carbon emissions may be possible at no net costs to the economy—

even at net savings.

Under the technological lens, the parameters of cost analysis change. Concepts like “life-cycle”

costs are pivotal in making the cost-effectiveness case for new technology. Existing barriers

(institutional or financial) to the rapid and widespread commercialization of new technologies are

seen as artificial constraints to be overcome by government and individuals. Ultimately, the

development of new technologies can create new industries and new jobs, changing the economic

baseline. The focus of analysis is on cost-effectiveness of solutions, not so much on the benefits

of the policy.

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The view through the economic lens fits the global climate change issue within the boundary of

market economics. The motivations of people in reducing pollution is unimportant; the critical

assumption is that people will act in their own self-interest as dictated by price signals. The global

climate change issue becomes another consideration in setting prices—an externality that needs to

be internalized. If that price increment does not result in significant reductions, it is because none

is economically justified.

Under the economic lens, the potential impacts of controlling greenhouse gases on the economy

versus expected benefits is a central variable in determining the degree and time frame of

reductions. Economic efficiency is the primary criterion for assessing emission reduction

programs. Any existing inefficiencies in the economic system are assumed to reflect market

reality and to be difficult to eliminate (and eliminating them may be undesirable). Uncertainty

about the potential benefits is understood to be a factor in determining the stringency of any

reduction program and a potential reason for stretching out compliance. For this lens, cost-benefit

analysis is very important in assessing potential control programs. To the extent that new

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technologies are projected to be cost-effective and to overcome any existing market barriers or

distortions, they are included in the cost-benefit analysis as viable alternatives to existing control

options.

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Those looking through the ecological lens are suspicious of attempts to measure the economic

effects of global climate change options. Most efforts to measure economic effect involve

comparing a carbon control scenario with a “baseline” projection. The baseline generally is

defined as the path the economy would take assuming no changes attributable to adoption of

climate change policies. However, the baseline also tends to connote a path with no distortion; it

is the path from which distortions are measured. This conveys some normative legitimacy on the

baseline. If global climate change arguments are correct, then the current path is not sustainable in

the long run, and the baseline means little—a concern reflected in proposals to incorporate “green

accounting” into major economic indicators, such as the Gross Domestic Product (GDP).67

Arguably, if an ecological perspective returned the actual path to long-term sustainability, that

scenario would represent the more reasonable baseline. Discussions of economic “growth” and

“distortions” are relative to one’s perspective on the long-term potential for economic growth in a

world with increasing carbon dioxide concentrations.

Commonly, those looking through the ecological lens tend to dismiss economic cost analysis, and

particularly cost-benefit analysis, as being of limited usefulness in the overall debate on global

climate change, while acknowledging that they can have utility in developing and choosing

specific options. From the ecological perspective, people should respond to the global climate

change crisis because of its threat to important values, such as the fate of future generations, not

because action can be justified on the basis of some narrowly defined cost-benefit analysis.

Traditionally, such analysis tends to place value only on those benefits that can be easily

quantified, while dismissing or ignoring many values that would be seen as governing through the

ecological lens. Viewed through the ecological lens, lives and such values as intergenerational

equity should not be quantified as a commodity.68 What people need are alternatives to many of

the choices that the marketplace provides based on traditionally defined economic

considerations.69

At the same time, a burgeoning area of study is ecological economics, and in particular analyses

to determine the economic benefits of ecosystems services, which include climate regulation.70

Carol S. Caron, “Integrated Economic and Environmental Satellite Accounts,” Survey of Current Business (April

1994), 33-49.

The ecological view was shown in the negative response to an economic analysis prepared for the U.N.’s

Intergovernmental Panel on Climate Change; “The Social Costs of Climate Change: Greenhouse Damage and Benefits

of Control” valued projected deaths of persons in OECD nations at $1.5 million each while deaths of persons from

China, India, and Africa were valued at $150,000 each. From an ecological or human rights standpoint the discrepancy

surfaced ethical concerns. See John Adams, “Cost-Benefit Analysis: The Problem, Not the Solution,” The Ecologist, 26

(January/February 1996), 3.

Peter G. Brown, “Toward an Economics of Stewardship: the Case of Climate,” Ecological Economics 26 (1998), 1121.

Robert Constanza et al., The Value of the World’s Ecosystem Services and Natural Capital,” Ecological Economics

25 (1998), 3-15 [originally published in Nature, 387 (May 15, 1997), 253-260]; the issue contains a number of

comments on the article as well.

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Such studies may serve to defend environmental values that are rarely accounted for in traditional

economic analyses; they also provide another example of the intertwining of the viewpoints.

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Although some would prefer that science dictate the timing and magnitude of environmental

policymaking, scientific knowledge actually represents a continuum of knowledge and

uncertainty. Policy initiatives go forward when a sufficient majority of the society concludes that

what is known about the problem outweighs the uncertainties, or that the risks of delay despite

uncertainty are not acceptable. In some cases, increases in knowledge about an environmental

problem lead to more uncertainty, not less. In other cases, increased knowledge about a problem

leads to widening the issue, not narrowing it.

In the case of global climate change, at least three parameters help determine how one is willing

to balance the knowledge-uncertainty aspect of science. These three parameters involve one’s

perception of the potential risk of the problem, the potential effectiveness of any reduction

program, and the potential cost of the solution. If one perceives the potential risk of the problem

to be slight, the potential effectiveness of any response to be questionable, and/or the potential

cost to be high, one will tend to require a high threshold with respect to scientific certainty before

one is willing to act. Conversely, if one perceives the potential risk to be high, the potential

effectiveness of any response to be reasonable, and the potential cost to be low, one will likely be

willing to act at a substantially lower threshold with respect to scientific certainty.

Each of the three lenses contributes to differing views on these parameters and on different

courses of action. For example, being optimistic that energy efficiency can be gained at low cost,

the technology lens can accept a somewhat lower threshold with respect to scientific certainty

because the risk of high cost is discounted. Likewise, the ecological lens’ concern about

unintended consequences and the protection of future generations lends itself to accepting a lower

threshold with respect to scientific certainty because of the precautionary need to protect the

biosphere regardless of cost. In contrast, the economic lens leads one toward a cost aversion

response, because the uncertainty may mean fewer benefits, a less effective response, and

potentially high cost. Those viewing the issue through this lens likely seek more certainty before

any significant investment is made in any solution.

In a study of the effects of personal beliefs and scientific uncertainty on climate change policy,71

two researchers, Lave and Dowlatabadi, concluded that uncertainty and the degree of optimism of

the decisionmaker were both important, but less so than whether the policymaker’s decision

criterion hinged on minimizing expected costs or on being as precautionary as possible. The

former criterion, focused on costs, essentially reflects the economic lens; the latter, focused on the

“precautionary principle,” essentially derives from the ecological lens. In a mix of scenarios,

Lave and Dowlatabadi found that those focused on minimizing expected costs would most often

support moderate abatement given existing uncertainties, while those focused on being

precautionary would more often support stringent abatement despite costs.

This interplay of uncertainty, information, and costs is summarized in Table 2. The perspective

on uncertainty can have tangible policy implications—as evidenced by the ongoing debate

Lester B. Lave and Hadi Dowlatabadi, “Climate Change: The Effects of Personal Beliefs and Scientific Uncertainty,”

Environmental Science and Technology, Vol. 27, no. 10 (1993), pp. 1968, 1972.

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between those who believe action to address global climate change is justified and those who do

not.

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Faced with a fundamental problem, such as the potential for global climate change, a policymaker

who is looking through the technological lens and focusing on technical fixes tends to take an

activist view of the government’s role—to support innovation and commercialization. In the same

situation, a policymaker who is looking through the economic lens and focusing on the costs and

benefits of action tends to view the government’s role as limited—to ensuring that any

misfunctioning of the market is corrected. And a policymaker who is looking through the

ecological lens and focusing on the need for action to solve the problem tends to see the

government actively playing crucial roles—to inform public understanding, to seek public

commitment, and to make available options for solving the problem.

These differing propensities on the role of government among the three perspectives are

summarized in Table 3. As described in this report, these differences have consequences for one’s

expectations for government action, depending on the lens one views global climate change

through. At the same time, these differing expectations can have consequences for how one views

the lenses themselves: that is, persons with a predisposition for limited government are likely to

find the economic lens a more appropriate way to approach the issue than the other two lenses,

whereas persons with a predisposition for activist government may be more comfortable with the

technology and/or ecological lenses.

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Table 2. Influence of the Lenses on Policy Parameters

Seriousness of Problem

Risk in Developing Mitigation Program Costs

By itself, the lens is agnostic on the

problem. The focus of the lens is on

developing new technology that can be

justified from multiple criteria, including

economic, environmental and social

perspectives.

Believes any reduction program should be

designed to maximize opportunities for new

technology. Risk lies in not developing

technology by the appropriate time. Focus

on research, development, and

demonstration; and on removing barriers to

commercialization of new technology.

Economic

Understands issue in terms of

quantifiable cost-benefit analysis.

Generally assumes the status quo is the

baseline from which costs and benefits

are measured. Unquantifiable

uncertainty tends to be ignored.

Believes that economic costs should be

examined against economic benefits in

determining any specific reduction program.

Risk lies in imposing costs in excess of

benefits. Any chosen reduction goal should

be implemented through economic

measures such as tradeable permits or

emission taxes.

Ecological

Understands issues in terms of its

potential threat to basic values, including

ecological viability and the well-being of

future generations. Such values reflect

ecological and ethical considerations;

adherents see attempts to convert them

into commodities to be bought and sold

as trivializing the issue.

Rather than economic costs and benefits or

technological opportunity, effective

protection of the planet’s ecosystems should

be the primary criterion in determining the

specifics of any reduction program. Focus of

program should be on altering values and

broadening consumer choices.

Approach

Technological

Table 3. Summary of Lenses

Approach

View of the Problem

Technological

Problem seen as opportunity for

new, more efficient technology.

Country seen as on the edge of an

energy transition.

Economic

Problem seen in terms of

internalizing a currently external

cost.

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Viewed from the bottom-up.

Tends to see significant

energy inefficiencies in the

current economic system that

currently (or projected)

available technologies can

eliminate at little or no

overall cost to the overall

economy.

Viewed from the top-down.

Tends to see a gradual

improvement in energy

efficiency in the economy, but

significant costs (quantified in

terms of GDP loss) resulting

from global climate change

control programs. Typical

loss estimates range from 1%

to 2% of GDP.

Views costs from an ethical

perspective in terms of the

ecological values that global

climate change threatens.

Believes that values such as

intergenerational equity

should not be considered

commodities to be bought

and sold. Costs are defined

broadly to include aesthetic

and environmental values that

economic analysis cannot

readily quantify and monetize.

Guiding Principles

Role of Government

Technology can solve many of the problems

involved if so directed.

Governmental sponsorship of and

intervention in technological development

can accelerate the commercialization of

appropriate technology.

The marketplace is the most efficient means

of controlling undesirable pollutants.

Private sector can solve problem given

appropriate incentives with minimal

governmental interference; prices are the

best signal.

Create market through

technological mandates.

Economic assistance through

research and development