CHAMPAIGN, Ill. – Twenty of the world’s top academic experts on energy and environmental economics will share research on how best to implement possible U.S. climate regulations during a conference this week for federal policy analysts.
The two-day forum will explore solutions to practical problems that could emerge if Congress adopts carbon-emission restrictions to curb global warming, said Don Fullerton, a University of Illinois finance professor and an organizer of the event.
“Our goal is to help make good policy. Examining the best ideas creates the best policy,” said Fullerton, a former deputy assistant secretary with the U.S. Treasury Department and an expert on the economic impact of environmental regulations.
Economists from Harvard, Stanford and other leading universities will present research to about 150 government policy analysts who would ultimately help steer U.S. climate policy, including representatives of the Environmental Protection Agency, the Office of Management and Budget and the energy, transportation and treasury departments.
The conference, scheduled for Thursday and Friday at the National Press Club in Washington, D.C., is sponsored by the National Bureau of Economic Research, a nonpartisan think tank that provides economic analysis for government, business and the academic community.
Research will focus on enforcement, monitoring and other implementation issues that could surface if the U.S. adopts a climate policy, which has stalled in Congress but could re-emerge by early next year, said Fullerton, who heads the NBER’s environmental and energy economics program.
“Now that the prospects are getting closer, we have to worry about more than just big questions like whether it should be a cap-and-trade system or a carbon tax,” he said. “Either way, there would be a lot of detailed problems with making it work.”
Issues that need to be considered, Fullerton said, include:
• How any carbon taxes should be collected. Taxes could be collected from users, such as at gasoline pumps, but Fullerton says the government might save millions of dollars in administrative costs if taxes were imposed at the source, such as domestic oil wells or when imported oil arrives in the U.S.
• Whether taxes should be considered on imports from countries with no climate policies. Carbon-emission standards would increase production costs in the U.S., creating an unfair competitive advantage for countries without climate policies, Fullerton said.
• Should climate policy address issues such as zoning? Fullerton says cities could help curb carbon emissions by encouraging urban condominiums that reduce commuting and urban sprawl.
• How should climate policy manage the tradeoffs between carbon-creating activities and forestry, which sequesters carbon? For example, Fullerton said, should energy producers be able to swap credits with tree growers and, if so, could those credits be traded internationally?
• Should government offset the negative impact of climate policy on the poor, who spend a higher percentage of their income on energy? Government could ease the impact by using a portion of climate policy revenue as subsidies, Fullerton said.
He says connecting policy analysts with academic experts will raise potential problems ahead of time, and provide a forum that ensures the best ideas are considered.
“There’s just this long, long list of practical considerations,” said Fullerton, a researcher with the U. of I. Institute of Government and Public Affairs, and the Center for Business and Public Policy in the College of Business. “I hope this conference can help steer policymakers toward the best possible policies.”
