Winter 2013

Designing a Durable Energy Policy

Ann E. Carlson and Robert W. Fri

Although the U.S. energy system seems to resist the changes necessary to meet today's challenges related to energy security and climate change, the system has gone through massive change several times since 1850. A major driver in each of these earlier transitions was an economic value, such as mobility, that markets could capture. Because environmental and security values are public goods, changing today's energy system will require a policy that creates a market signal reflecting these values. However, it is also necessary to craft a policy framework that is both durable over a long time period and able to adapt to new information as it becomes available. This essay examines some of the possible attributes of a durable and adaptable policy. The discussion is necessarily preliminary because relatively little formal research exists on this topic. However, even a preliminary examination suggests that considerations of policy durability could affect the choice between a carbon tax and a cap-and-trade system.

ANN E. CARLSON is the Shirley Shapiro Professor of Environmental Law at the UCLA School of Law, where she is also Faculty Director of the Emmett Center on Climate Change and the Environment. Her work has appeared in the CaliforniaMichiganNorthwestern, and UCLA Law Reviews and the Harvard Journal on Legislation, among others. Two of her articles have been selected for republication in an annual compilation of the best environmental law articles of the year. She is a coauthor of Cases and Materials on Environmental Law, 8th ed. (with Daniel A. Farber and Jody Freeman, 2010).

ROBERT W. FRI, a Fellow of the American Academy since 2010, is a Visiting Scholar and Senior Fellow Emeritus at Resources for the Future, where he previously served as President. He has also served as Director of the National Museum of Natural History and Deputy Administrator of both the Environmental Protection Agency and the Energy Research and Development Administration. He is Chair of the Academy's Alternative Energy Future project.

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