Will President Trump’s decision to walk out from the Paris climate accord mean that U.S. greenhouse gas emissions will increase? It depends, in part, on what states and cities do next. Several blue-state governors have already announced their commitment to emissions reduction, while red states are considerably less likely to prioritize climate action.
Can America’s Blue States Tackle Climate Change on Their Own?
There’s a certain logic to wealthier, more liberal states leading the way.
June 06, 2017
Summary.
For the time being, U.S. climate policy will be fractured by political geography. The coalition of blue states and cities will not be able to significantly reduce emissions on their own. However, by subsidizing the shift to green energy, richer blue states can make the eventual transition easier for red fossil fuel-dependent states. This coalition is unlikely to be able to dramatically reduce national emissions through their own efforts. The nine states in the coalition account for only 14% of total CO2 emissions. Still, these coastal states are a powerful force in national markets, containing 26% of the nation’s population and producing 30% of its GDP. They have the ability to protect infant green industries from the market power of incumbents who do not internalize their environmental costs. For instance, California alone is responsible for nearly 50% of national Tesla Model S sales. Wealthy, liberal states provide demand for green innovators to engage in learning-by-doing, which helps products improve and become cheaper. The net effect of green companies selling their first generation products to green “guinea pig” consumers in states such as California is that consumers in other states will later have the option to purchase a higher quality less expensive product. While the U.S is not providing international leadership on climate change mitigation, there is a certain irony that President Trump and progressive governors together may have stumbled upon a politically winning formula for tackling climate change. Coal miners will face less risk of unemployment. Teslas will continue to be demanded, and conservatives in the Houston heat can crank up their air conditioning. Back in 1817, David Ricardo introduced the concept of comparative advantage in analyzing the determinants of who exports what to whom. In 2017, Donald Trump and Jerry Brown have inadvertently rediscovered this key idea.