Toward a Future-Facing Climate Policy

This Article provides a systems analysis of climate change policy that links together subsystems relating to innovation, energy economics, interest group politics, and government regulation. It is easy but misleading to equate climate policy with emissions regulation. That is too narrow a frame. We urgently need a new energy system because of climate change, but regulating carbon emissions is only one part of a bigger project. We cannot assume that as carbon emissions decline a new energy system will build itself—nor will society be willing to eliminate fossil fuels without confidence in their replacements. An effective climate policy requires much more than simply restricting fossil fuels and hoping the market will fill the gap. The energy transition requires incentives for energy research, development, and scaling up new energy technologies. For the energy transition to happen, we also need sufficiently large-scale deployment to trigger economies of scale and learning by doing. There is much to be gained, then, from shifting the paradigm from emissions reduction to the energy transition. To make a homely analogy: The reason for a kitchen renovation may be dry rot, and the first step is ripping out rotten wood. But the point of the remodeling is putting in a new kitchen, not just getting rid of the rot.