Sustainable Development Law & Policy Volume 15 | Issue 1 Article 2 A Race to the Middle in Energy Policy James E. Parker-Flynn Follow this and additional works at: http://digitalcommons.wcl.american.edu/sdlp Part of the Energy and Utilities Law Commons Recommended Citation Parker-Flynn, James E. "A Race to the Middle in Energy Policy." Sustainable Development Law & Policy 15, no. 1 (2015): 4-14, 52-55. This Article is brought to you for free and open access by the Washington College of Law Journals & Law Reviews at Digital Commons @ American University Washington College of Law. It has been accepted for inclusion in Sustainable Development Law & Policy by an authorized administrator of Digital Commons @ American University Washington College of Law. For more information, please contact [email protected]. A RACE TO THE MIDDLE IN ENERGY POLICY by James E. Parker-Flynn* INTRODUCTION overwhelmed by competing or concurrent desires to exploit Climate change is the gravest threat currently facing fossil fuel resources like natural gas, coal, and oil. Moreover, humanity.1 To avoid catastrophic climate change over the com- “leakage” and “seepage” of emissions — the former occurs ing century, global emissions of greenhouse gases (“GHGs”) when a state imports fossil fuel-derived energy from out of state 8 must peak in the very near future and decline steeply thereaf- while the latter occurs when a state exports fossil fuels — will ter.2 A significant barrier to reducing GHG emissions domesti- ensure that GHG emissions will not necessarily decrease, even cally is the conflict between and within state energy policies.3 where the in-state supply of energy is generated from renewable Some states encourage renewable energies through Renewable resources; in other words, a state can race against itself. As a Portfolio Standards (“RPSs”) and carbon emissions trading result, the United States will not contribute significant reductions schemes, while others promote the production and utilization of in greenhouse gases, climate change will at best be moderately fossil fuels; most, however, promote both to some degree.4 slowed, and the nation will suffer the consequences. Internally, states are In order to avoid this motivated to utilize avail- race to the middle, I pro- able energy resources — “The gains from energy pose that the nation adopt both renewable and fos- a unified energy policy sil fuel — for in-state policies that encourage that not only mandates generation of energy, but increased consumption of are simultaneously moti- renewable energy generation renewable energy through vated to develop those a national RPS, but that resources for exporta- will be offset or overwhelmed also restricts the extrac- tion.5 Texas, for exam- tion and exportation ple, produces the most by competing or concurrent of fossil fuels through natural gas and crude oil Resource Production of any state, but also has desires to exploit fossil fuel Limits (“RPLs”) to adopted an aggressive resources like natural gas, ensure net reductions in RPS and leads the nation greenhouse gas emis- in wind energy genera- coal, and oil.” sions. A federal policy tion.6 Texas’ use of wind that focuses on all areas energy in state reduces of energy production and GHG emissions, but Texas oil and natural gas — whether consumption will prevent burned in state or exported — increase GHG emissions. Thus, a “bottom” state from undermining the contributions of a “top” some states will partake in a “race to the top” in climate policy state, and simultaneously prevent internal state conflicts that by reducing net GHG emissions through state energy poli- lead to stagnant net emissions. cies, others will “race to the bottom” by increasing net GHG A NEW RacE-to AnaLYSIS emissions, while still others will “race to the middle” through state policies that effectively maintain current GHG emissions Race-to theory presents an analytical framework in which levels. Whether a state races to the top, bottom, or middle to examine climate change, but a complete analysis must avoid is primarily determined by the energy resources available in the segmentation that has plagued previous analyses. It is clear any given state, the economic costs and benefits of develop- that the United States must reduce GHG emissions to help ing, using, and exporting those resources, along with ancillary combat climate change. If current domestic energy policies fail environmental and social concerns. to significantly reduce GHG emissions, then the nation must This Article posits that the various “races” will have the implement more effective solutions. Existing race-to analyses practical effect of leaving the nation as a whole, and the states of energy approaches to the climate problem generally focus on 9 individually, squarely in “the middle.” States’ prevailing desire whether RPSs represent a race-to-the-top. These analyses, in to exploit local resources assures that, absent federal regulations, the United States will not contribute to significant reductions 7 in global GHG emissions. The gains from energy policies *Associate at Carlton Fields Jorden Burt. The views and opinions expressed in that encourage renewable energy generation will be offset or this article are those of the author and do not represent the views and opinions of Carlton Fields Jorden Burt or its clients. 4 SUSTAINABLE DEVELOPMENT LAW & POLICY following traditional race-to formulas, fail to account for certain happens to be; decreased regulations might mean more pollu- factors that could lead to the middle—stagnant national emis- tion and health consequences, but increased job opportunities. sions in spite of reduced emissions locally. Because the middle But all of the effects of the regulations are constrained to the represents a danger to the United States that is only slightly less populations of the regulating states and proximate areas, and worrisome than the bottom, it is imperative to know whether possibly the populations of states that lost out on the new coal state energy policies are actually racing to the top, bottom, or plant because of more stringent regulations. somewhere in between. Contrastingly, the national approach proposed herein is Most commentators have examined the competing races — more consistent with the premise of the Article because the those to the top and bottom — from a regulatory framework; harms of increased greenhouse gases in the atmosphere manifest they have examined whether state governments, in the absence both globally and locally,17 but cannot be constrained to a single of federal regulation, will craft environmental regulations that geographic area. Indeed, climate change disparately impacts dif- will either increase or decrease social welfare.10 Public welfare ferent geographic areas,18 but regional effects are not determined is generally measured through an analysis of costs and ben- or altered by the energy source or the method of energy genera- efits that quantifies the ecological, economic, and public health tion and extraction. For example, all GHG emissions from coal- implications of environmental regulations,11 though at times the burning power plants contribute to climate change, yet people measure is the mere decrease or increase in environmental regu- near a coal-burning power plant in Pennsylvania will experience lations.12 Further, commentators examine how individual states a different set of climate consequences than people near a coal race with others to attract business, and how those races affect burning power plant in South Texas.19 Thus, decreasing GHG the populaces of those states.13 emissions from coal plants in Pennsylvania will have different This Article diverges climate consequences on from traditional race-to the local population than analyses in two critical if the same reductions respects. First, it explores “Indeed, climate change are made in South Texas. how states’ decisions disparately impacts different Further, because GHG in promoting and emissions are “well- using available energy geographic areas, but regional mixed” in the atmosphere, resources will affect net increased emissions from GHG emissions from a effects are not determined or a Pennsylvania coal results-oriented perspec- plant will affect distant tive. A race to the bottom altered by the energy source populations in addition thus leads to increased to local and proximate GHG emissions, while or the method of energy populations. It is thus a race to the top leads to of no moment whether decreased GHG emis- generation and extraction.” the emissions of an indi- sions. The middle repre- vidual state decrease if sents stagnant emissions. the national emissions Public welfare — and associated analyses of costs and ben- do not. Accordingly, the Article examines whether state energy efits — is not specifically addressed because it is assumed that policies lead to increased, decreased, or stagnant emissions on increased or stagnant emissions will be detrimental to the long- the national level. In order to properly examine the climate race term health and economic stability of the country.14 Likewise, from a national perspective, however, it is critical to understand the Article only considers climate change effects, and does not the state energy policies that form the foundation of the national consider other environmental consequences of state policies that energy policy. lead to greater or lesser emissions. Second, this Article examines how the climate impacts of STATE ENERGY POLICIES energy decisions — made