CALIFORNIA STATE UNIVERSITY, NORTHRIDGE

The Effects of Government Impact on Climate Change

A graduate project submitted in partial fulfillment of the requirements

For the degree of Master of Public Administration in Public Sector Management and Leadership

By

Jian Yu Huang

August 2020

The graduate project of Jian Yu Huang is approved:

______Dr. Paul D. Krivonos Date

______Dr. Linda-marie Sundstrom Date

______Dr. Henrik Palasani-Minassians, Chair Date

California State University, Northridge

ii Table of Contents

Signature Page ii

Abstract iv

Introduction 1

Policy Background 5

Stakeholders 7

Literature Review 10

Research Design (Methodology and Data Collection) 15

Design 15

Methodology and Data Collection 16

Sampling 16

Limitations 17

Background 18

Conclusion 23

References 27

iii Abstract

The Effects of Government Impact on Climate Change

By

Jian Yu Huang

Master of Public Administration in Public Sector Management and Leadership

Climate change has been reported to occur for many decades, and the changes have been documented by the Intergovernmental Panel on Climate Change. The Intergovernmental Panel on Climate Change has demonstrated an increasing global temperature trend of 0.2 degrees

Celsius per decade due to greenhouse gas emissions. Greenhouse gas emissions have been produced by human activities, such as using aerosol products, burning fossil fuels, farming livestock and agriculture, and manufacturing in factories. Acts like the Clean Air Act and Clean

Power Plan seek to regulate the effects on the environment and mitigate the effects of climate change. The purpose of this project is to determine the impact of a specific climate change policy in the United States. The research design will examine the effects of the cap and trade policy on the states participating in the program, in terms of the carbon dioxide emissions, electric generation, and economic impact.

iv Introduction

In striving to reduce carbon dioxide emissions from existing fossil fuel power plants, the

Environmental Protection Agency introduced the Clean Power Plan; the Clean Power Plan had a timeline and goal of reducing the emissions to below 2005 levels by 30% in 2030 (Chen, Tanaka,

& Siddiqui, 2018). The Clean Power Plan, which was developed in 2014 and enacted in 2015 under President Obama’s administration, imposed the rules for greenhouse gas emissions and power plants (Wallach, 2019). Through the Clean Power Plan, the mission was to provide regulations for the entire power sectors; the Environmental Protection Agency set emission rate targets state-by-state and identified building blocks of technological strategies for states to adhere to meet required reductions of emissions (Murray, Pizer, & Ross, 2015). However, this has since changed when the President Trump administration came into office; the Clean Power

Plan, unfortunately, became inactive and no longer strictly upheld, and the Clean Air Act, which was designed to protect the general population of people by protecting their health and the environment they live in from air pollution, was also no longer upheld and regulated by the federal government (Wallach, 2019). The Clean Air Act of 1970 was one of the first environmental laws that were developed and implemented in efforts to regulate the amount of air pollution on a national level, with subsequent amendments that were developed to further control produced emissions from automobiles, investigate air pollution resulting from all transportation, and address problems of toxic air pollutants, the depletion of the ozone, and acid rain, and (Oren,

2010).

32 states in the United States have developed and released their action plans to address the climate change effects and make efforts to reduce the greenhouse gas emissions (Center for

Climate and Energy Solutions, 2020). The local government acknowledged that climate change

1 can result in serious issues, requiring actions and collective effort, especially when the general public’s health is at risk (Deetjen, Conger, Leibowicz, & Webber, 2018). However, even though climate action plans have been developed and implemented on a local governmental level,

Deetjen et al. (2018) found deficiencies in climate change plans. While the cities in the United

States addressed transportation and building quality, they also neglected to focus on the urban form, and disincentives for automobiles (Deetjen et al., 2018). Additionally, findings from

Lepitzki and Axsen (2018) demonstrated that the most stringent policies were necessary to achieve greenhouse gas emission targets. To effectively contribute, the local government must reevaluate and cohesively implement their climate action plans to target a reduction in greenhouse gas emissions and make a significant impact on climate change (Deetjen, et al.,

2018).

Climate change can demonstrate impacts on the environment, economy, and lives of animals, plants, human beings, and other living beings (Xin, Peng, & Sun, 2019). Greenhouse gas emissions that are produced by carbon dioxide from our activities daily such as public transportation, driving a car, or using air conditioning can contribute to climate change (Deetjen et al., 2018). These are also known as emissions from urban areas. Greenhouse gas emissions from urban areas account for 70% of the emissions in the United States, which include emissions directly from transportation fuels or indirectly from power sectors (Deetjen et al., 2018).

Greenhouse gas emissions from fossil fuels and other hazardous pollutants have been found to contribute to an increase in cardiovascular and respiratory diseases as well as mortalities

(Cushing et al., 2018). The increase in greenhouse gas emissions have been posited to also increase in the average temperatures of our planet; the Intergovernmental Panel on Climate

Change has reported the average temperatures to be on the rise since they have been

2 documenting and making records of all the changes in the global temperatures every year, and every decade (Delmotte-Masson et al., 2019). The Intergovernmental Panel on Climate Change has produced special reports for the past two decades on how the average global temperatures have been the warmest ever since the beginning of data collection and recording on the temperatures.

During the President Obama administration, they centralized their focus on sustainability, and sought to protect the environment, and limit the production of the greenhouse gases; they sought to reduce greenhouse gas emissions by 17% from 2005 emissions by 2020 (Burtraw,

Linn, Palmer, & Paul, 2014). During the President Obama administration, the United States was also one of many countries that participated in the Paris Agreement, making significant and substantial efforts to reduce the carbon dioxide and greenhouse gas emissions, which in turn would potentially reduce the negative impacts resulting from climate change (Wallach, 2019).

With the United States participating in the agreement, all participating countries accounted for

97% of the carbon dioxide emissions (Holtsmark & Weitzman, 2020).

However, this focus shifted when President Trump’s administration came into the term.

The President Trump administration went a different course to address climate change and strove to make plans in withdrawing the United States entirely from the Paris Agreement (Sakharov,

2018). The current administration’s view has the potential to significantly influence the general population of people to become more aware of climate change and to also address it. With the shift in focus from the previous term, addressing climate change was not the top priority on the federal level, a national plan was not implemented or heavily enforced.

Although there is no federal policy that is implemented across all the states to address the environmental and climate changes, this is contrasted on the local government level. Cities and

3 states have individually begun to participate in programs that aim to reduce greenhouse gas emissions. For example, with the cap and trade policy, 9 states have already been participating in reducing greenhouse gas emissions through the Regional Greenhouse Gas Initiative (RGGI,

2019). Each state will be responsible for determining which climate policy would be suitable for their people and power generators if they all produce the same results. The Environmental

Protection Agency can also initiate their standards for providing opportunities for states to improve their emission reductions. Stationary sources, starting with the generators that produce electricity, are responsible for about 40% of the carbon dioxide emissions in the states (Burtraw et al., 2014). The actions to take begin with more states coming together to participate in climate change policies such as the cap and trade policy, in efforts to achieve carbon dioxide emission reductions.

The purpose of this project is to examine the environmental and economic impact and effects of a climate change policy that can be implemented on the local government level since individual states have already begun addressing the issue of climate change. The cap and trade policy aims to reduce greenhouse gases such as carbon dioxide emissions. This project aims to evaluate its effects on reducing greenhouse gases as well as whether the policy can contribute to the economy.

4 Policy Background

In November 2016, the Paris Climate Agreement was enacted, with President Obama providing his full support towards the mission to collectively reduce the country’s production of greenhouse gas emissions (Wallach, 2019). The Paris Climate Agreement necessitates a collective global effort that strives to limit the increasing global temperatures to 1.5 degrees

Celsius; the collective effort requires taking necessary actions that work towards alternative methods that are both efficient and sustainable in preventing the temperatures from increasing further (Delmotte-Masson et al., 2019). There has been a collective of countries that have come to an agreement and consideration that global warming close to 2 degrees Celsius would not be safe and there should be action taken to work towards sustainable development goals (Delmotte-

Masson et al., 2019). The Paris Climate Agreement continued to be upheld until the end of

President Obama’s term when President Trump came into the administration in which he overtly announced that the United States would be withdrawn from the Paris Climate Agreement even though as stated in the agreement, no country can withdraw themselves until three years have gone by after it has been in full effect (Wallach, 2019).

However, President Trump’s administration is not the first administration to change the direction towards climate change and environmental health. The administrations of President

Ronald Reagan and President George W. Bush also targeted efforts towards reducing regulation, budgets, cuts in staff, and undermining the policies (Frederickson et al., 2018). During the

Reagan administration, President Reagan appointed staff members who opposed the Clean Air

Act, rules in water quality, and protections in hazardous waste to run the Environmental

Protection Agency (Frederickson et al., 2018). Within the first year, the Environmental

Protection Agency was disruptively disorganized with the distribution of staff members to other

5 offices, and the dissolving of the enforcement office, leading to the drastic reduction of civil enforcement cases by three quarters (Frederickson et al., 2018). During this time, the mandates and rules were not heavily enforced to regulate the impact on the environment. Moreover, during the President Bush administration, the science behind climate change was both rejected and neglected. Employees of the Environmental Protection Agency reported that the President Bush administration delayed or removed health protections, demonstrated significant delays in policymaking standards for water quality with arsenic, temporarily excluded some of the requirements in the Clean Air Act, and reversing mercury regulations in power plants

(Frederickson, 2018). Additionally, when it came to the Safe Drinking Water Act, fracking was exempted as they pushed for the development of fossil fuels, leading to more harm towards the environmental conditions (Frederickson, 2018). The United States can play a significant and substantial role to steer the direction in whether climate change or environmental impacts should or should not be addressed. The United States can also be the driving force that sets the standards and provides the model for making sure that global temperatures do not rise.

6 Stakeholders

The stakeholders that are and will be impacted by the implementation of climate change policies are everyone who resides on this planet. In unity, the human population will greatly benefit from the mitigation of the impact resulting from climate change—even individuals who are in opposition of the climate change policies will undoubtedly benefit from them in the long- term. All living beings will benefit from them from an environmental perspective. The local government comprising of the cities and states who implement their climate change policies are also strong stakeholders in preserving our planet. However, some individuals or entities oppose climate change policies for their gain. These individuals or entities may be comprised of companies, corporations, or people who would substantially and drastically face a reduction in revenue and profits if there were no longer fossil fuel companies. In the United States, fossil fuel companies have produced revenue in the hundreds of billions; ExxonMobil produced revenues that significantly exceeded 400 billion dollars in 2019 (ExxonMobil, 2019). There may be conflicting interest when it comes to taking actions to address the impact of climate change as well as ceasing or reducing the general public’s usage of fossil fuels, especially if there are large financial gains in play in addition to the loss of potential jobs for people working in that field.

The individuals and entities who are in opposition to the climate change policies would most likely want to retain and preserve their ability to receive profits and revenue from this industry.

Moreover, researchers have examined a framework called the Advocacy Coalition

Framework that analyzes the features of policy processes and changes, as well as assert that the organizations' group into competing advocacy coalitions based on the shared policy beliefs and that the coalitions play an important role to influence the outcomes of the policies (Kukkoken,

Yia-Anttila, & Broadbent, 2017). There are three advocacy coalitions involving the economy,

7 ecology, and science in which Kukkonen et al. (2017) demonstrated how the framework could be applied to the climate change policymaking in the United States. The government has had much difficulty in passing federal climate laws in the past, and studies have shown that there have been ties with influential organizations that are linked to the fossil fuel industry (Kukkonen et al.,

2017). Although there may be individuals who are in opposition to climate change policies, the issues of climate change do not simply disappear and does not indicate that climate change has not been occurring.

Researchers have already provided many warnings to the people that global warming is occurring, but not much attention has been given towards it until recently. Even with more concerns and awareness surrounding the topics of global warming and climate change, there are not enough actions that are taken to mitigate the effects of global warming and climate change.

Effective policies are recommended to be developed, proposed, and implemented to take into account the data on the rise of global mean temperatures in the past two decades, the rising sea- levels, and the adverse effects of acid rain on crops, water, and animals in the ocean. The policies should not be perplexing to understand, ambiguous, or limited in information. Everyone should be aware of the policies that are implemented in their country. Moreover, there should be a shift in focus from fossil fuels to sustainable alternatives involving the usage of clean energy, and materials that would result in a reduction of greenhouse gas and carbon dioxide emissions. To limit global warming, coal-based electricity would need to be phased out. Strengthening the near-term climate policy of lowering the greenhouse gas emission on a global basis by 2030 would likely reduce stranded coal capacity and the costs (Johnson, McCollum, Rao, & Riahi,

2015). In order to reduce the stranded coal capacity, the electricity demand can be reduced by improving energy intensities through keeping existing plants operating through lifetime

8 extensions and Johnson et al., (2015) provided an alternative to transferring the global energy system from one that relies on fossil fuels to another system with low carbon technologies in attempts to decrease the mean global temperature. This would be a sustainable alternative for producing energy.

Another example of an alternative sustainable method is the usage of urban albedo, which can be placed on the roof, providing heat-reduction and much lower surface temperature, which in turn can lessen the need for the usage of air conditioning (Akbari, Menon, & Rosenfeld,

2009). Urban albedo is light in color and absorbs less sunlight than the conventional dark- colored roof, which leads to lower surface temperature and reduction of heat (Akbari et al.,

2009). These materials can be used during summertime temperatures to utilize less air conditioning and reduce the air conditioning costs and using reflective materials in a world-wide implementation can have the potential reducing carbon dioxide emissions which can offset the increase of greenhouse gas concentrations (Akbari et al., 2009). Additionally, car manufacturers should work towards providing more sustainable vehicles that are not dependent on the burning fossil fuels, as well as incentives in opting to choose those vehicles instead of vehicles that run on fossil fuels. The policymakers could place more limitations of carbon dioxide emissions, to potentially shift the corporations’ focus and perspective towards finding better sustainable alternatives for the planet and human preservation.

9 Literature Review

Emissions trading such as the cap and trade, tradable performance standard, or tradable green certificate policy approaches intend to reduce the production of greenhouse gas emissions in the environment, using a market-based approach (Hustveit, Frogner, & Fleten, 2017). The cap and trade policy places a limit on the pollution that is produced from powerplants and other generators that produce carbon dioxide emissions (Burtraw et al., 2014). Additionally, through the cap and trade policy, the forces in the market are gathered and collected to reduce emissions in a way that is cost-effective (Burtraw et al., 2014). This approach places a price on greenhouse gas emissions and adopts clean-energy practices without necessitating specific actions that must be taken in order to reduce the emissions. This approach also provides incentives for reducing the production of greenhouse gases. In the United States, the Regional Greenhouse Gas Initiative

(RGGI) was the first mandatory cap and trade program that was created to set limitations and restrictions on the carbon dioxide resulting from the generators and powerplants (Chan &

Morrow, 2019). Not all states are participating in the RGGI—the only states in the country who are currently participating are Connecticut, Delaware, Maine, Maryland, Massachusetts, New

Hampshire, New York, Rhode Island, and Vermont (Regional Greenhouse Gas Initiative, 2019).

The RGGI came into establishment in 2005, intending to auction off the emissions of carbon dioxide in 2008; under the RGGI, emissions are expected to be reduced by 45 below 2005 levels

(Regional Greenhouse Gas Initiative, 2019).

The other policy that addresses the greenhouse gas emissions being produced in the tradable performance standard. Unlike the cap and trade policy, the implementation of the tradable performance standard is not that common in the United States (Zhang, Chen, & Tanaka,

2018). Additionally, the tradable performance standard would also meet its goal by the reduction

10 of total emissions, or the increase of energy output from zero to low emitting energy sources

(Zhang et al., 2018). With the tradable performance standard, each source is provided with a compliance obligation or a rate on the benchmark emissions rate which displays the amount of carbon dioxide emissions that are produced by the tons per megawatt-hour of generation; the generators will then give their credits equal to the actual emissions rate multiplied by their annual generation (Burtraw et al., 2014). The surrendered credits mimic the emissions prices being imposed, like cap and trade auction (Burtraw, et al., 2014). Additionally, each generating unit may sustain the cost of emission or earn revenue on the emission (Chen, Tanaka, &

Siddiqui, 2018).

When analyzing the cap and trade policy, Burtraw et al. (2014) found that the electricity prices have been estimated to increase by 9% on the national level; however, the reductions of

400 million short tons can be obtained, when it is compared to the baseline of 2073 million short tons. Over time, the national average in electricity price under the cap and trade policy was estimated to increase by 9% in costs (Burtraw et al., 2014). There is also a 22% lifetime energy savings within the first year of costs being $180 megawatt per hour that comes with reductions over time of about $40 megawatt per hour (Burtraw et al., 2014). Moreover, the total social cost that was determined by Burtraw et al. (2014) demonstrated results in $28 billion in auction revenue under the cap and trade policy. The total social cost was measured with a method called the partial equilibrium framework; this method considers the changes in the consumer surplus and producer that is within the electricity sector, and the changes in the government revenue

(Burtraw et al., 2014).

Hibbard, Tierney, Darling, and Cullinan (2018) also examined the economic impact of a cap and trade policy in states participating in the RGGI program. To examine the economic

11 impact, Hibbard et al. (2018) implemented a PROMOD model that analyzes the electric sector outcomes from the purchase of allowances, wholesale prices, electric supply offers, and the effects of changes in demand and electric generation of funds towards energy efficiency technologies. Hibbard et al. (2018) also implemented the IMPLAN model to combine all expenditures of the states to examine the effects of RGGI on the economy. When economic impact in the 2015 to 2017 time period, Hibbard et al. (2018) study found that the economic impacts per region amounted $34 per capita in the net economic value and a net positive economic total of 1.4 billion dollars in all nine states participating in the RGGI program. All states participating in the RGGI program received and spent about 1 billion dollars of the auction proceeds on energy-efficient measures, renewable energy projects in the community, assistance in customer’s bills, research and professional development programs, and other programs targeting a reduction in greenhouse gas emissions (Hibbard et al., 2018). The money they received from the RGGI program contributed to the flow of the economy and the positive economic results come from the states selling their allowances of carbon dioxide emissions through the centralized auction and using their proceeds to benefit the state’s economy (Hibbard et al., 2018).

In a study conducted by Zhang et al., (2018), the researchers examined both the cap and trade program, and the tradable performance standard program by analyzing their theoretical properties, and under their regional power mark, they found that their cap and trade policy was more effective than the tradable performance standard. In their findings, they also discovered that state by state policies that held a regional power market with the trading of emission rate credits still had different prices across states even though there was no transmission congestion

(Zhang et al., 2018). The Environmental Protection Agency has established the equivalence

12 between cap and trade goals and the tradable performance standard goals and by multiplying each state’s rate target for emissions with the anticipated production of electricity that also takes into account of the economic growth factor, potentially affecting the consumers’ electricity consumption (Zhang et al., 2018). When comparing the two policies, under a tradable performance standard program, the instrument that is used for trading in the power market is the emission rate of credit, with a unit of dollars per megawatt-hour; for the cap and trade policy, the allowance would be dollars per ton (Zhang et al., 2018).

However, even though these programs aim to regulate greenhouse gas emissions by placing an emissions cap, these programs also run the risk of not having any impact on overall emissions. In a government report produced by California’s Legislative Analyst’s Office (LAO), it was stated that although the greenhouse gas emissions were below the cap for the first several years in participating in the program, the cap was not likely to produce any effects on the overall emissions (LAO, 2017). It was also reported that many factors led to the reduction in greenhouse gas emissions such as lowered economic growth from the 2008 recession, and the implementation of other complementary policies involving standards on vehicles or renewable energy, leading to the likelihood that the emissions were not directly reduced by the cap and trade program (LAO, 2017).

Additionally, in a study conducted by Cushing et al. (2018), the researchers found that there were no improvements in environmental equity concerning the co-pollutant emissions that were damaging to people’s health. These co-pollutants involve nitrogen oxides, air toxins, sulfur oxides, particulate matter, and other compounds that were highly volatile (Cushing et al., 2018).

Cushing et al. (2018) found social disparities such that neighborhoods with lower socioeconomic backgrounds had higher annual average greenhouse gas emissions and co-pollutant emissions, as

13 opposed to neighborhoods with higher socioeconomic background. With these demonstrated disparities, specific communities and neighborhoods have been shown to be at a disproportionate disadvantage to being exposed to higher amounts of air pollutants and greenhouse gas emissions from the regulating facilities.

14 Research Design (Methodology and Data Collection)

Design

To better understand the effects of the cap and trade policy in the United States, the research design will involve quantitative data analysis. The contribution of this project is to discover the extent of the impact that climate change policies like the cap and trade can have on the environment, economy, and for addressing climate change. Based on the findings from the research design, the benefits of cap and trade policy, if any, will be determined.

To conduct quantitative data analysis, data will be compiled onto a Microsoft Excel spreadsheet. Data will be retrieved from the period of 2018 to 2020 from publicly available databases such as the RGGI, Environmental Protection Agency, Energy Information and

Administration, and other government databases. The RGGI is a cap and trade policy program that some states in the United States are currently participating in. The purpose of choosing this timeframe is to examine the current data. Data will be divided into two groups: RGGI electric generators, and non-RGGI electric generators, and the variables will be examined between the two groups. The two-sample T-Test will then be implemented on the collected data to determine the mean differences between the variables of the two groups. The following hypotheses for this project are:

1. The null hypothesis is that there is no difference between the mean of the two groups

(RGGI and non-RGGI) on reducing carbon dioxide emissions, reducing the carbon dioxide emissions rate, reducing the electric generation, and providing output towards the economy.

2. The alternative hypothesis is that there is a mean difference between the two groups

(RGGI and non-RGGI) on reducing carbon dioxide emissions, reducing the carbon dioxide emissions rate, reducing the electric generation, and providing output towards the economy.

15 Methodology and Data Collection

To measure the environmental impact of the cap and trade policy program, data will be retrieved on the variables of the reductions in the output of carbon dioxide emissions (short tons of CO2), the carbon dioxide emission rate (pounds of CO2/megawatt-hour), and the electric generation (megawatt-hour) from the RGGI database on each of the participating states. Data will also be retrieved from the RGGI database and other government databases such as the

Environmental Protection Agency, on the same states with non-RGGI generators for comparison.

To measure the economic impact of the RGGI generators and the non-RGGI generators, data on the total electric revenue will be compiled from the same collective group of states. For the RGGI generators, the revenue would be the auction proceeds, and data will be retrieved from the RGGI databases. For the non-RGGI generators, revenue data will be retrieved from a governmental database such as the Energy Information and Administration on individual states, with the same states participating in the RGGI program. Additionally, RGGI generators and non-

RGGI generators will then be assessed to determine how and what portion they use their proceeds or revenue towards the economy, such as making contributions towards methods, research, services, employment, equipment, and other related factors in energy efficiency, renewable energy, or alternative energy.

Sampling

Purposive sampling will be utilized as the focus is only on the collective group of states participating in the RGGI, which are Connecticut, Delaware, Maine, Maryland, Massachusetts,

New Hampshire, New York, Rhode Island, and Vermont. The analysis will also be conducted on non-RGGI generations within the same states.

16 Limitations

There are limitations to this project as the methodology will focus only on the states participating in the cap and trade policy as a collective whole. As delineated by the Cushing et al.

(2018) study, there were social disparities with neighborhoods receiving higher disproportionate amounts of pollutants and greenhouse gas emissions under the cap and trade program. This project does not examine the individual disparities of the cap and trade program per state. More analysis should be conducted on a state-by-state level to determine how effective each facility in the state is at reducing greenhouse gas emissions. Future research would also benefit from an analysis of factors contributing to more reductions in carbon dioxide emissions or electric generations in states participating in RGGI. Additional research would also be beneficial in comparing the cap and trade policy with other policies like the tradable performance standard or the tradable green certificate.

17 Background

Researchers have long believed that climate change will impact the economic and social areas, areas in addition to the environment. There is increasing evidence to show that climate change has been occurring. According to the World Meteorological Organization, since the beginning of data collection of global temperatures in 1850, the past two decades have shown the warmest and highest global temperatures (Delmotte-Masson et al., 2019). For example, the global mean temperature, from the period of 2006 to 2015, was 0.87 degrees Celsius—higher than the average over the period from 1850 to 1900; the estimated global warming has also been displaying an increasing trend that shows the global temperatures increasing by 0.2 degrees

Celsius, which is confidently attributed to the increasing greenhouse gas emissions (Delmotte-

Masson et al., 2019). Moreover, human activities, such as manufacturing in factories, burning fossil fuels, farming livestock and agriculture, and using aerosol products, lead to the increase in global warming of 1.0 degree Celsius, which is above the recorded pre-industrial levels

(Delmotte-Masson et al., 2019). Researchers have reported with high confidence that the data trend will continue to rise and increase with the likelihood of reaching 1.5 degrees Celsius

(Delmotte-Masson et al., 2019). The increasing global temperatures is one of many impacts attributed to climate change. The current climate models have projected further loss of marine ice sheet in Antarctica and Greenland, an increase of 1.5 degrees Celsius in global warming, an increase in the sea-level with a range of 0.26 to 0.77 meters by 2100, the extinction and loss of species (8% of plants, 6% of insects, and 4% of vertebrates of 105,000 species examined, have been projected of a loss of half their geographic range), and the degradation and loss of boreal forests and high latitude tundra (Delmotte-Masson et al., 2019). Moreover, with the rise in sea- level, there would be a demonstrated impact on people using freshwater; it would also change the

18 water for agriculture, which grows food and feeds animals (Climate Ready Water Utilities,

2015). The carbon dioxide will damage the atmosphere on our planet, and change everything in society, politics, and economics (Climate Ready Water Utilities, 2015). Once the sea-level goes up, the land would likely be lost, and people would not be able to live in that part of the land

(Climate Ready Water Utilities, 2015).

Given the current projections from the models, sustainable methods can potentially be utilized to prevent further climate change and further adverse effects from occurring. Not much observable action is currently being taken to offset or reduce the effects of climate change, which can be attributed to the social norms in the United States. It may not be easy to support sustainable methods when many people have not acknowledged the effects of climate change, are in denial, or highly oppose the climate change poli1cies. Social norms, which are the principles that provide specifications on the type of actions to be carried out by a social group, are one of the most powerful and influential methods to induce actions with the general population of people, especially when it comes to climate change (Wong-Parodi & Feygina,

2019). As a collective whole, everyone in the United States, have not fully come together with a united mission in reducing the effects of climate change. The current administration also plays a significant role in ensuring that people can come together collectively to address the significant issue. However, with the current President Trump’s opposition towards the climate change policies that have been enacted during the previous administration under President Obama, it would be a difficult feat to have a shared perspective in addressing climate change.

The media has not heavily supported or encouraged the implementation of climate change policies, or sustainability methods in the way we live. However, the media plays a major role in influencing people’s perspectives, as it serves as a primary guide of communication for

19 information. Individuals who have beliefs that their actions have impacts on global warming are more likely to support climate policy, and their general attitudes also influence policy preferences; these attitudes come from the trust in experts and trust in the media since it is unreasonable to expect that the general public will know all the issues and problems that are currently going on in the planet (Stoutenborough, Bromley-Trujillo, & Vedlitz, 2014). The public places their trust in the experts and the media, and often it leads to blind trust; The media has the power to persuade the general public into supporting climate change policies

(Stoutenborough et al., 2014).

There are also recent polls that have reported that 6 in 10 Americans have become more aware and show more concern towards global warming (Gustafson, Leiserowitz, & Maibach,

2019). Moreover, in a survey that was conducted by Leiserowitz et al. (2019), more than 55% of the 1,291 surveyed Americans have some understanding that global warming is caused by humans, 32% attributed global warming to natural changes, 16% believe that global warming is not occurring, 38% believe that the United States is experiencing harm from global warming, and

38% have personally experienced the effects of global warming. Further survey data also indicated that few Americans, about 12% of the participants, believe that it is too late to do anything to address climate change and global warming, and 40% believe that actions of a single individual would not make significant changes or strides towards climate change (Leiserowitz et al., 2019). Additionally, most of the surveyed participants indicated that they were worried about the harm resulting from droughts (64%), flooding (60%), extreme heat (69%), and the shortage of water (59%) (Leiserowitz et al., 2019). Individuals are experiencing the increasingly hot temperatures, coming across more wildfires that place threats to their homes, and experiencing

20 more floods. There is no doubt that individuals are highly concerned about the negative effects resulting from climate change and global warming.

Additionally, in a survey that was given to 2034 adults, people were willing to pay about

$79 to $89 per year to reduce greenhouse gas emissions by 17% by 2020 (Kotchen, Boyle, &

Leiserowitz, 2013). The researchers also found that there were sociodemographic differences such that individuals with greater education, as well as those with greater household income were willing to pay more (Kotchen et al., 2013). Older individuals and individuals associated with the Republican party and those with no affiliation displayed much lower pay estimates; nevertheless, many people are willing to contribute some costs to help address climate change, and policymakers should consider that to develop the climate change policies (Kotchen et al.,

2013). Kotchen et al. (2013) provided information about the first willingness-to-pay estimates from individuals who are in support of a national climate change policy. Although the sociodemographic characteristics differed in terms of the willingness to pay for the reduction of greenhouse gas emissions within different policy instruments, such a carbon tax or cap and trade policy, the extent to which people would pay to contribute to mitigating the effects of greenhouse gas emissions should bring to light the seriousness of climate change and necessitates the need for the general population of people take action (Kotchen et al., 2013).

With different administrations coming into term every 4 to 8 years, political points of view are also shifted on the topic of climate change. Most politicians avoid becoming political activists. The government has not seemingly been involved in climate change action to address long-term impacts. The climate change problem cannot easily be resolved or fixed in over a short period due to the major impact that it currently has on the economy. The usage of fossil fuels has become such a major necessity in our everyday lives, especially when it comes to transportation

21 such as driving our cars, taking the bus, or riding on the train. We cannot operate without the burning of fossil fuels unless there is a more effective alternative method for transportation. It is without a doubt that burning fossil fuels is currently one of the leading contributions to emissions of greenhouse gases in our atmosphere, such that the levels in carbon dioxide have been at an all- time high with approximately 387 parts per million when it previously was about 280 parts per million during pre-industrial levels (Sun et al., 2009). The economy would be significantly changed and shifted if fossil fuels were no longer necessitated or in use.

22 Conclusion

This project contributes to the existing literature and research on the impact of the cap and trade policy on both the environment and the economy when implemented at the local government level. This project demonstrates the importance of understanding and determining climate change policies that can be beneficial in many areas. The findings can provide support for the cap and trade policy being effective in mitigating the production of carbon dioxide emissions in the environment, which could potentially offset the effects of climate change if the reductions continue in the current direction. Moreover, when benefits to the economy are considered, there is potential for more buy-in from the administration. Past research demonstrated that the RGGI contributed to the flow of the economy, with states utilizing their allowance proceeds towards programs that focus on funding more energy-efficient methods, renewable energy methods, and other research and programs geared towards reducing greenhouse gas emissions (Hibbard et al., 2018). The allowance proceeds flowed both directly and indirectly into the economy through dollars spent on the services, programs, equipment, and training. While the expenditure can vary state by state due to how and where they spend their allowance proceeds, the overall collective contribution benefits the economy.

Additionally, the findings from this project can provide further evidence of its economic impact on the states. Climate change policies like the cap and trade policy could provide incentives to the power sectors by giving them the ability to make profits on generating electricity. It is also important to consider the motivations to increase the states’ willingness to participate in the policy, especially when only 9 states in the United States are currently participating. Economic benefits, in addition to reductions in carbon dioxide emissions, may provide the incentives that other states need to move forward with participation.

23 When looking back to the past, the Clean Air Act that was originally enacted in 1963 provided the framework and paved the way for climate policies in the United States and the

Environmental Protection Agency has been regulating the environmental conditions since its development (Burtraw et al., 2014). The implementation of climate change policies is necessary for improving environmental conditions. Some people know that climate change policy is complicated when interacted with the legislation and regulation of how the system will be implemented, with a specific degree structure for the goal to meet for the standard. When the

President Obama Administration was present, the Environmental Protection Agency was urged to move forward with regulations as much as they possibly can to achieve greater domestic reductions in greenhouse gas emissions (Burtraw et al., 2014). Emissions from existing power plants were then heavily scrutinized by the Environmental Protection Agency for its potential impact on the environment and stakeholders (Bielen, 2018).

Climate change has resulted in a hot climate and increasingly high temperatures of 95 degrees Fahrenheit or 35 degrees Celsius for the people in Australia; as a result, heat-related deaths have been a common occurrence with vulnerable groups such as the elderly population

(Banwell, Dixon, Bambrick, Edwards, & Kjellstrom, 2012). To combat the heat-related deaths and deal with the extreme heat, the usage of air conditioning is necessary as well as other personal cooling methods. Unfortunately, there is also the cycle of using too much electricity from the air conditioning which would inevitably lead to the production of more greenhouse gas emissions, with the emissions further negatively impacting the climate (Banwell et al., 2012).

Additionally, the increasingly hot temperatures in Australia are projected to continue occurring;

Akompab, Williams, Grant, Walker, and Augoustinos (2013) demonstrated that heatwaves have been projected to increase in frequency and extremity due to climate change. Since the climate

24 models have projected increase temperature rises and more frequent heatwaves across all of

Australia, policymakers and local authorities need to consider the actions that must be taken to reduce the negative impacts on the climate, lessening the climate change impact (Akombap et al.,

2012). The negative impacts of climate change are unfortunately not contained in a specific region or location—the impacts occur on a global level.

Additionally, there are some areas around the globe such as northern and central Asia,

South and North America, and northern Europe have been experiencing drastic increases in the rain, while some areas such as the subtropics and the tropics have drastic and severe drought cycles (Long, 2009). These are abnormalities in the weather that have resulted from the effects of climate change. Moreover, around the world, the effects of climate change have also led to changes in landscapes. For instance, with the increasing temperatures comes with increasing glacier melting and the size of the lakes (Long, 2009). Rivers become larger from the melting snow and glaciers leading to higher and earlier spring runoffs and resulting in degraded water quality and thermal temperature (Long, 2009). These effects of climate change undoubtedly affect the animals and plants living there as well. Some plants and animal species have relocated to different environments due to the changes in the climate with variations in migration timing, changes in plankton, algal, and fish in the high-latitude oceans (Long, 2009). Greenhouse gas emissions can be reduced especially when it results from industrial or human production. The

Clean Air Act was developed in 1970 due to the pollution resulting from the burning of fossil fuels. These emissions contribute to the rise of global temperatures, and temperature rises are not just attributed to the country or a specific region. It happens on a global level and it affects everyone who lives on this planet.

25 Climate change policies would benefit greatly from presidential support. Unfortunately, the current President Trump administration is not prioritizing climate change policies, which was demonstrated by the withdrawal of the United States from the Paris Climate agreement, and the lifting of the prohibition on the oil and gas exploitation in the Artic (Sakharov, 2018). These activities of the United States’ administration conflict with the environmental and climate change concerns that the Arctic Council has; however, despite the changes, there are foreign and internal policies with the United States that could potentially serve to preserve the long-term policy trend

(Sakharov, 2018).

Additionally, the policies that address climate change provides incentives for working towards reducing greenhouse gas emissions, instead of setting specific actions for what should or should not be done. Although it would be ideal for the federal government, to pave the way towards sustainability and preserving our planet, local governments have the upper hand in producing and regulating the climate change policies. All local state governments should consult evidence-based practices when considering climate change policies like the cap and trade policy within their state. Many states have already begun to operate this policy, which could model for other states to implement a similar policy. By doing so, states could both address the impact of climate change and stimulate the economy.

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