Energy Policy 118 (2018) 440-454
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Governing the global climate commons: The political economy of state and
local action, after the U.S. flip-flop on the Paris Agreement
Institute for Energy and the Environment, Vermont Law School, United States
Climate change subnational actions
Economy of state policies
United States withdrawal from the Paris Agreement, which follows well-known principles of common pool re¬
source management, poses a serious challenge, but it could provide a golden opportunity to cement and advance
the efficacy and legitimacy of the Agreement. The Agreement encourages subnational units to participate in a
polycentric, multistakeholder governance structure. As many as two dozen states have policies that could put
them in compliance. These states represents over 40% of U.S. emissions, making them the 4th or 5th largest
emitter. Subnational compliance would give the Agreement a major boost particularly if they seek observer
status and are exempted from sanction. Even without such rewards, the states have strong reasons to follow this
path. As non-fossil fuel producing states, they have clear interests in developing local resources as the basis for
their electricity sector. As a large group, they gain economies of scale and network effects. As part of the
American Federalist system, they would be defending their right of independent action. At COP 23, the U.S.
subnational entities played a prominent role and the treaty participants reacted strongly against the Trump
administration position, while embracing the activities of U.S. subnational entities. The U.S. presence was
limited and isolated.
After months of agonizing, frequently in very public debates be¬
tween members of the administration, President Trump declared his
intention to withdraw the U.S. from the Paris Agreement. The defini¬
tiveness of the decision was always clouded by the fact that the actual
withdrawal could not take place for three years, so the U.S. could still
participate in events, and hints that the administration might re¬
consider, if the U.S. got a better deal.
The reaction of the signatories to the Agreement was more decisive.
There were strong and broad statements that supporters were unshaken
in their resolve. In the U.S. units of local government (individual states
and cities) affirmed their commitment to the goals of the agreement.
California, which has the sixth largest economy in the world, seized the
mantle of U.S. leadership in supporting the agreement. Many U.S.
corporations also affirmed their commitment to the goals. 3
This paper analyzes the policy actions and debates that developed
both in the U.S. and globally around the decision of the Trump
Administration to withdraw U.S. participation in the Agreement. 4 This
debate raised issue that touch key elements of the structure of the
Agreement. First, it highlights the tension between national and local
energy policy authority - under both American federalism and the
subsidiarity principles of the Paris Agreement that encourage action by
subnational entities. Second, it describes how these governance con¬
flicts play out in the context of the unique institutional and governance
structure of the Agreement. Third, it examines the underlying economic
forces that drive groups of U.S. states and other subnational entities in
opposite directions (potentially compliant v. non-compliant), which
underscores the dramatically different economic interests that motivate
The paper focuses on the actions leading up to the decision to
withdraw to stress the underlying fundamentals at play. We also point
out that the immediate actions after the decision to withdraw are
consistent with those prior dispositions. For the purposes of the
E-mail address: firstname.lastname@example.org.
1 Trump (2017).
2 Resistance was instantaneous, with California in the lead, Leslie (2017); Davies (2017); Davenport and Nagourney (2017); Meyer (2017); Reilly (2017c); local governments were
represented too. Wattles (2017); Graeber, 2017; Kahn, 2017; Plumer, 2017; Renews, 2017.
3 America’s Pledge (2017), claims almost 1400 corporations (C2ES; Cusick, 2017a; Fairley, 2017; Hirji, 2017a; Hulac, 2017b; Reilly, Sean, 2017c).
4 Cooper (2017), framed the challenge of transforming the electricity sector as requiring policy to pass through the horns of a global dilemma - development with decarbonization. The
structure of the Paris Agreement was explained as a response to this dilemma. This paper elaborates on the development of a new challenge, the Trump administration’s refusal to accept
decarbonization as a problem to be solved and withdrawal from the Agreement (Friedman, 2017d; Joselow, Maxine, 2017b; Smith-Schoenwalder, 2017).
Received 1 March 2017; Received in revised form 1 February 2018; Accepted 13 March 2018
Available online 24 April 2018
0301-4215/ © 2018 Elsevier Ltd. All rights reserved.
Energy Policy 118 (2018) 440-454
analysis, we consider the initial reaction to fall in the period from the
announcement of the intention to withdraw until the first meeting of
the parties after the announcement. Therefore, the entire period ana¬
lyzed covers a little over a year with three subperiods of intense activity
- the lobbying to influence the Administration’s decision (election day
until June 2017), the announcement of the decision itself (early June
2017), and the meeting at which the U.S. was “on the way out”
(November 2017). We focus on the first two subperiods to build a map
of the political economy of the decision, then asses the actions in the
third period as a reflection of the underlying political economy. The
paper focuses on three sets of actors who will deeply affect the early
phase of the development of the Agreement - the U.S. Federal level, the
parties to the Agreement, and the U.S. subnational entities that are
supporting the agreement.
Explaining and predicting actions of key players does not, however,
predict an outcome. On the contrary, with complex and powerful forces
pushing and pulling the implementation of the Agreement in different
directions, even challenging its very existence, the outcome is un¬
certain. This paper argues that, ironically, an unintended consequence
of the U.S. withdrawal could be to strengthen the Agreement.
The paper is divided into four parts. The first section outlines the
contemporary debate and tension between two horns of the dilemma
the Trump administration faced - participation vs. federalism.
Section 2 describes climate change as a common pool resource
problem and discusses how the Paris Agreement is a response to this
unique challenge. It also briefly describes how the analysis of the digital
revolution can be applied to the electricity sector to support the con¬
clusion that the Paris Agreement can be, and is, perhaps, the only, ef¬
fective institutional response to climate change.
Section 3 shows why American Federalism may play a key role that
reinforces the Agreement, even after the U.S. decision to formally
withdraw from the Agreement because the subnational entities have
strong economic interest and a significant amount of political in¬
dependence to act on those interests.
The paper concludes in Section 4 with a brief discussion of the
policy options for each of the main actors and the direction of policy
development. Having taken the position that the U.S. withdrawal could
have the ironically positive, unintended consequence of strengthening
the Agreement, I evaluate the options/likely actions of the parties from
the point of view of seizing on the moment to promote the success of the
2. Trumps' climate change dilemma
2.1. The Paris Agreement
Over the first half year of the Trump administration, arguably the
most public, long running policy soap opera was the decision of whe¬
ther to withdraw from the Paris Agreement or not. Individual members
of the cabinet had taken public positions on opposing sides. 5 6 7 The Pre¬
sident’s closest advisers were severely divided. White House staff
5 Hess (2017a, 2017j), Cushman and Lavelle (2017), Chemnick and Lehman (2017b);
the hand wringing became so profound and public that Chemnick and Evans (2017a),
likened Trump’s indecision on participation to Hamlet. While others fretted about par¬
ticipation being put on and taken off the table (Chemnick, 2017c). This is not to suggest
that there were not other issues that involved very loud division. However, they were
much more external -between the Administration and the Congress, the Courts, the Re¬
publicans and the Democrats (Battelle, 2017a; Bowlin, 2017; Colman, 2017; Davenport,
2017; Koss, 2017; Lavelle, 2017b; Loris and Schaefer, 2017; Mooney and Eilperin, 2017;
Mooney et al., 2017).
6 The State Department favored participation including Tillerson and his No. 2, as well
as the head of USAID (Banerjee et al., 2017, Hess, 2017k, Chemnick, 2017k). Perry, at
Energy (Irfan, 2017, Walton, 2017) favored participation, while the defense/intelligence
community saw climate change as a threat including Coates in intelligence (Mintz, 2017).
Pruitt, at Environment (Heikkinen, 2017a) was opposed (Waldman, 2017).
7 Kushner, Ivanka in favor Bannon and Ebell opposed (Chemnick, 2017j, Lehmann,
2017a, 2017b; Chemnick, 2017n).
meetings were cancelled and rescheduled, but ultimately failed to re¬
solve the issue. 8 The Administration was being lobbied to participate
and comply by advanced industrial nations 9 and corporations, 10 while
conservative think tanks were pushing it towards withdrawal. One of
the central points of debate raised by the advocates of participation was
the loss of America’s international leadership role combined with the
questioning of the willingness and ability of other nations to fill the
With policies to promote the production of fossil fuels already im¬
plemented and the primary policy to reduce carbon emissions from
existing electricity generation facilities (i.e. the Clean Power Plan) a
high visibility target for weakening or abandonment, 1 ' it was clear that
the U.S. would have great difficulty complying with the Agreement. The
decision not to fund the U.S. commitment to the United Nation’s Green
Climate Fund was a clear indication of the Trump administration’s
unwillingness to actively participate in the global effort to combat cli¬
mate change. 11 Therefore, a strategy of participating in order to lower
the targets and reallocate the burdens was floated. 16
This not only magnified the divisions within the Administration, it
also quickly elicited a vigorous response from officials closely asso¬
ciated with the Agreement and nations that intended to comply. They
rejected that idea. 1 The rationale that the U.S. had been treated un¬
fairly in the treaty was also contested. 20 One important issue that plays
a key role is the very different understanding that the Parties have of
how the process is intended to operate. Some advocates in the U.S.
debate argued incorrectly, as discussed below, that the Agreement was
meaningless since it was voluntary and could not be enforced. 22
2.2. American federalism
The ‘toing-and-froing’ on participation interacted with a second
8 Chemnick and Evan (2017a), Hess (2017i).
9 Germany (Battelle, 2017b), France (Balaraman, 2017c), the UK (Balaraman, 2017a)
and Nordic Nations (Hobson, 2017) in the unique context of the Arctic nations (Hess,
2017k; Volcovici, 2017).
10 Those pushing for participation and compliance included large money managers
(Casey, 2017) and corporations (Chemnick, 2017a, 2017g; Lehmann, 2017b; Hirji,
2017b; Hess, 2017e).
11 American Energy Alliance (2017); Homer and Lewis (2017), Hess (2017b).
12 China was the leading contender by far (Battelle, 2017c) and Moody’s (2017)
pointed out that the three largest emitters (China, the EU, and India) had all reaffirmed
their commitment to the Agreement (Lavelle, 2017c) and taken shots at the shift in
American policy (Balaraman, 2017f; Chemnick, 2017f, 2017m). The potential costs to the
U.S. covered a range of issues from loss of diplomatic leadership (Hess, 2017a, 2017g,
Ifran, 2017; to jobs, (Reuters, 2017b)) to renewable technology (Ferris, 2017; Chemnick,
2017e; Hulac, 2017a; Selin and Najam, 2016; Sengupta, 2017).
13 Hafstead (2017), concluded that Obama policies were likely to fall short by a small
margin under a best-case scenario, while Trump’s would miss by a wide margin.
14 The most strident strategy involved reversing the endangerment finding Hess
(2017a); American Energy Alliance (2017); Artz, 2017; Reilly, Sean, 2017c; Trauzzi,
2017; Wamsted, 2017.
15 Hess (2017d); Friedman (2017b).
16 Horner and Lewis (2017). A letter from a “major American coal company” outlined
the concessions the U.S. should seek for participation including changing the rules at
international financial institutions to fund coal projects, a major focus of the Green Cli¬
mate Fund on cutting-edge coal technologies, renegotiating the nationally determined
contribution (NDC), which was deemed to be “de facto done anyway,” with the executive
order killing the power rule.” (Chemnick, 20171) Domestic policy would amend the Clear
Air Act to give time for carbon capture technology to develop, with increased funding
subsidies and incentives for coal. Similar demands had been made by Trump advisors
17 Chemnick (2017a).
18 Irfan (2017); Walton (2017a, 2017b); Chemnick and Lehman (2017a); Balaraman
(2017d, 2017e, 2017g, 2017i); Battelle, 2017d; Chemnick, 2017h; Doughy, 2017;
19 Chemnick (2017a), Cushman and Lavelle (2017); Lehmann (2017a), Hess (2017f),
20 Chemnick and Lehman, 2017b; Irfan, 2017; Walton, 2017a, 2017b.
21 Irfan, 2017; Chemnick and Lehman, 2017b.
22 Cushman and Lavelle (2017); Hess, 2017f; Balaraman (2017b); Chemnick and
Energy Policy 118 (2018) 440-454
policy dilemma, American federalism. While the federal government
was promoting fossil fuels, a substantial number of states were heading
in the opposite direction, toward much greater reliance on renewable
resources and aggressive supply-demand integration and manage¬
ment. 2 A dozen individual states declared their belief that they could
comply with the Agreement, while a growing number of cities had
announced their intentions to rely on a very high level of renewables. 24
The Federal government has jurisdiction over interstate commerce
and the treaty making power under the U.S. constitution, but all other
policy areas are reserved to the states. Where this line is drawn is a
source of constant debate, and the early days of the Trump
Administration exhibited this very dilemma. The headline issues in the
tug of war over local rights involved contradictions like the Trump
Administration aggressively arguing that cities should not become
sanctuaries for immigrants, but simultaneously attempting to devolve
authority for key health care decisions to local authorities.
There are similar examples in the energy space. For example, the
Trump administration granted North Dakota the right to regulate sto¬
rage of captured carbon, 2 ' but fretted over how to deal with California’s
right under the Clean Air Act to write its own set of standards to reduce
air pollution. 26 California had long been pursuing an expanded western
grid that would provide important geographic and technological di¬
versity and facilitate operating the grid at much higher levels of pe¬
netration of renewables." However, the advent of an extremely hostile
administration in Washington gave it pause because wholesale trans¬
actions between Western states participating in a joint grid manage¬
ment organization that would cover a wide geographic area and cross
state lines would be subject to the jurisdiction of the Federal Energy
Regulatory Commission (FERC). 6 The FERC was being reshaped to
reflect the Trump administration’s preference for coal and hostility to
renewables, 2 but here too there were tensions. The FERC, which is
responsible for energy markets and committed to competition, hesitated
to embrace a Department of Energy proposal to build subsidies for
baseload (coal and nuclear) into market transactions' 11 and ultimately
rejected the proposal, asking the regional transmission operators to
explain how they work to ensure reliability. 31 Its action in abandoning
the Clean Power Plan (CPP) did not go as far as some supporters wanted
and sounded this localism theme in doing so. A number of states and
localities challenged federal authority in a variety of ways.
This dilemma interacts broadly with the Paris Agreement, which is a
treaty among nations that encourages action by subnational entities and
offers them a route to participation as “observers” under the treaty, as
discussed in the next section. The intense, public discussion and un¬
certainty are testimony to the importance of these matters, globally and
23 Hess, 2017c; Cooper, 2012a.
24 Hess (2017c), Moody’s (2017), Walton (2017a, 2017b).
25 Holden (2017); Ayres, 2017; Heikkinen, 2017b, 2017c.
26 Meyer (2017). A similar inconsistency triggers a huge flap when Florida was in¬
cluded, then exempted from the lifting an Obama-era offshore drilling ban (Shankman,
27 See Cooper (2017), Chapter 6.
23 Joselow (2017a).
29 The differences were obvious, but to underscore the magnitude of the divide, Hess,
2017a, reports that the League of Conservation Voters had given Obama a B + , while
Trump received an F; Chemnick, 2017a; Balaraman (2017h); Cama (2017).
30 The effort of the Trump administration to force electricity ratepayers to pay base¬
load operators above market costs, on the theory that the market was not “properly”
reflecting the value of baseload, unleashed furious opposition. Bade, 2017b, Bade, 2017c,
Gilmer, 2017a, 2017b, 2017c; Coffman-Smith, Andrew (2017); Bifera (2017); Northey
(2017); Fowlie (2017); Orvis and Boyle (2017); St. John (2017). Even compromises, were
hotly debated, Silverstein (2017); PJM (2017), Heidom (2017).
31 Bade and Maloney, 2017; Base.
32 EPA (2017); Friedman and Plumer (2017); E&E (2017c); Artz, 2017; Trauzzi, 2017.
33 For example, challenging federal rules affecting coal production (Gilmer, 2017a,
2017b, 2017c); putting up data the Trump administration wanted to restrict (Weston,
2017); demanding more input (Streater, 2017); Adopting clean power plans (Holden and
Kucro, 2017; Plumer, 2017).
3. Governing a global commons
3.1. The Paris Agreement as common pool resource management
The Paris Agreement is an Addendum (hereafter Agreement) to
the United Nations Framework Convention on Climate Change
(UNFCCC) Report (hereafter Report) of the Conference of the Parties on
its twenty-first session. The Report and the Agreement are roughly of
equal length and deserve equal attention, since the former provides
justifications for and fleshes out policy prescriptions in the latter.
Climate change is a global commons problem. Individual actions
that emit greenhouse gases affect all people who live in the commons.
Individual emitters are responsible for dramatically different levels of
cause and have very different levels of capability to respond. Moreover,
there is no overarching authority to set limits and order actions. These
characteristics make a polycentric, multi-stakeholder, collaborative
governance structure necessary. The approach the parties arrived at
in Paris can be described in terms of well-known principles of "common
pool resource management." The definition of common pool resources
and their management are firmly established in the economic literature
thanks to the work of Elinor Ostrom, who received the Nobel Prize in
economics in 2009. Her acceptance speech provides the analytic fra¬
mework used in this paper for characterizing the Paris Agreement.
Ostrom notes that for a quarter of a century, Samuelson’s (1954)
identification of two types of goods - public and private - was
dominant. Beginning in the 1960s, scholars identified hundreds of local
and regional governance arrangements that do not fit into either cate¬
gory (see Table 1). Common pool resources were “overtly added” to the
framework in the
Public goods, like national defense, involve outputs from which it is
difficult to exclude individuals (all people in the defended territory
benefit) and the enjoyment by one person does not detract from the
enjoyment by another (the output is non-rivalrous or non-subtractable).
Private goods are the opposite of public goods; easy to exclude and
highly subtractable (I eat my apple and you cannot). Club goods are
excludable but not highly subtractable (artwork in a museum), al¬
though they may be subject to congestion. Common-pool resources are
difficult to exclude, like the atmosphere, but subtractable or con-
gestible. Your pollution may impact all users and, with many polluters,
the impact on the resource may be severe.
The objective of the analysis of common-pool resource systems is “to
understand the broader institutional regularities among the systems
that were sustained over a long period of time and were absent in the
failed systems.” 31 A basic set of design principles came to be defined as
sets of “rules in use” that communities develop to manage a common-
pool resource without recourse to an external, governmental authority.
The list of key principles to define effective common poll resources
management had evolved with field research. Ostrom provided an up¬
dated list in her Laureate speech, which is reorganized slightly and
applied to the Paris Agreement in Table 2.
The implication of this line of analysis was to demonstrate that the
assumption of a “tragedy of the commons,” 39 e.g. the classic problem of
overgrazing by individual sheep owners, was not an inevitable outcome
and did not require either the privatization of the commons or the
dictates of some central government to eliminate the problem. Needless
34 UNFCCC (2015b).
35 UNFCCC (2015a).
36 Cooper, 2013. The third industrial revolution of which the transformation of the
electricity/energy sector can be seen as a part (Cooper, 2017), has several other key
aspects that can be analyzed as common-pool resource management. These include the
Internet protocol and its governing institutions (Cooper, 2013); many of the physical
(Cooper, 2006, 2005) and intellectual property (Cooper, 2006) systems that make up the
communications resources system.
37 Ostrom (2009), p. 410; Samuleson (1954).
38 Ibid., p. 9.
39 Hardin (1968).
Energy Policy 118 (2018) 440-454
Expanding the typology in the 1970s (new types in bold).
Extent of Rivalry, Subtractability of Use
Difficulty of Excluding Potential
Common-pool resources local: irrigation systems
regional: fisheries global: Atmosphere
Private goods: food, clothing automobiles
Public goods: peace and security of community, national defense,
knowledge, fire protection, weather forecasts
Toll goods: theaters, private clubs, daycare centers
Ostrom, Elinor, 2009. Beyond Markets and States: Polycentric Governance of Complex Economic Systems. Prize Lecture, http://www.nobelprize.org/nobel_prizes/
economic-sciences/laureates/2009/ostrom_lecture.pdf. p. 413.
The design principles of the paris agreement as a collaborative common-pool resource management institutional arrangement.
Sources: Adapted and updated from Mark Cooper, 2017. The Political Economy of Electricity: Progressive Capitalism and the Struggle to Build a Sustainable Power
Sector (Santa Barbara, Praeger) pp. 26-28.
CPR Rules Necessary for a Viable Structure Rules Embodied in the Paris Agreement
Constitutional rules govern the way the overall resource system is constituted;
particularly how collective choice rules are defined. How does the resource system
come into existence?
Collective choice rules embody the procedures by which the operational rules are
changed. How can the operation of the system adapt?
Operational rules govern the activities that take place within the borders of the
resource system. How does the system work?
Boundary rules specify how participants enter or leave their positions. How are users
Position rules associate participants with an authorized set of actions. Who gets to use
the resource and who oversees it?
Aggregation rules specify the transformation function to map actions into outcomes.
How is the resource measured and controlled?
Authority rules specify which sets of actions are assigned to positions and how those
actions will be overseen. How are users allowed to exploit the resource?
Payoff rules specify how benefits and costs are required, permitted, or forbidden in
relation to players based on the full set of actions taken and outcomes reached, as
well as how the provisioning and maintenance of the resource system will be
provided. What are the incentives, taxes, and fines that elicit proper behaviors?
Scope rules specify the set of outcomes that may be affected. How do actions impact
the resources and other users?
Information rules specify the information available to each position for purposes of
monitoring and enforcing compliance with the rules. What flow of information best
encourages, manages, and distributes the resource?
Monitoring: Users and resources.
Enforcement: Conflict resolution. Graduated Sanctions
Border relationship to larger socio-economic systems:
Resource border conditions
The governance of the common pool resource system is created by the United Nations
Framework Convention on Climate Change
The Parties, acting through the Conference of the Parties have the authority to adapt
and improve the operational rules (as happened in Paris in 2015).
Being based on a convention, it has the trappings of a traditional international
agreement, but the dynamics of its governance—the operational rules—resemble the
institutions of a traditional common pool resource system.
The set of commoners is defined as the Parties to the Convention, which is the province
of nations. Nations also have primary responsibility for local energy policy.
Contributions to decarbonization are required. Strategies are defined by individual
Parties and must be consistent with the shared goal. Progressive burdens and
obligations are outlined.
The responsibility attached to each commoner is both individual and shared. The
nations define their contributions and are subject to a collaborative review of the
appropriateness of the contribution. Consideration is given to the capabilities of the
individual nation and the likelihood that the combined effect of the individual
contributions will achieve the shared goal.
The Agreement follows the principle of subsidiarity, delegating responsibility to self-
organized, self-governing policy sectors (i.e., nation states).
At a high level, the principles for the distribution of both burdens and rewards are laid
out. The Agreement is aggressively progressive, in both laying a heavier burden on
developed Parties to reduce emissions, and in helping developing Parties achieve the
dual goals of development and decarbonization.
The Agreement adopts a more aggressive target for minimizing temperature increases,
which drives the steps necessary to achieve the outcome.
The Agreement seeks to hold the Parties accountable by establishing effective
monitoring and accountability. It outlines a great deal of continuous reporting and
information exchange to promote transparency and facilitate the application of social
pressures to elicit compliance. In this regard, the Agreement calls for immediate and
ongoing efforts to continually assess and refine the goals and relationships.
Intense transparency and information sharing
Critique by community
The Agreement intends to facilitate a flow of technology and resources across borders
Subnational units and non-governmental entities are encouraged to participate actively
and give direction in the implementation of the agreement.
to say, given the location of these institutions between the market
(property) and the state, 0 this is an intensely studied and debated
framework. Here suffices it to say that collaborative, self-organizing
solutions are possible and frequent.
The challenge of developing effective common-pool resource man¬
agement approaches varies depending on the nature of the resource.
While there are “many subtypes of goods that vary substantially in
regard to many attributes,” 41 in her Laureate speech, Ostrom identified
key characteristics that suggest pollution of the global climate resource
is particularly challenging. There is high mobility of resource units and
significant difficulty in measuring impacts, if not output. The resource
40 Cooper (2013), emphasizes this aspect in contributing to the strength of the solution
and the problems of governance that it creates.
41 Ostrom (2009), p. 412.
base takes a long time to regenerate, if, in fact, it can. It covers a very
large spatial range. It has a large and constantly growing number of
users. 42 Several of these key elements of the Agreement’s common pool-
resource model that play prominent roles in the policy debate are the
focal point of this analysis.
Common pool resource management institutions are collaborative
and not imposed by some external authority. Those who declare the
model meaningless misunderstand the nature of the enterprise. In these
models, legitimacy is built through the consensus process; it is not
imposed by forces from the outside or above. The governance solution
42 Ibid. p. 8.
Energy Policy 118 (2018) 440-454
had to be geographically polycentric and vertically coherent, affording
flexibility to the parties involved. This required collaborative solutions
and reciprocity around shared goals building up norms of responsibility
through the transparency of a vigorous information/evaluation frame¬
work and developing mechanisms for conflict resolution. Ultimately
imposition of graduated light-touch sanctions for inappropriate or in¬
adequate actions would have to be developed. As with any multi-sta¬
keholder approach that relies on the principle of subsidiarity and de¬
legates responsibility, the success of the Paris Agreement will be
determined by practice. The Paris Agreement got the theory right, but it
is practice that determines success or failure.
Starting with a confrontation with one of the most important and
powerful commoners might not be ideal, but it did have three aspects
that may be constructive. First, it led to an initial set of “light-handed”
responses, like social disapproval, criticism and shunning, which fits the
need for responses to be graduated. Second, it provided the opportunity
to build solidarity by socially rewarding positive actions taken by
subnational entities with praise and enhanced participation. Third, ra¬
ther than hashing out difference of opinion and nuances about com¬
mitments and plans to reduce emissions, which was certain to be con¬
tentious, the parties got to stand together to confront a common enemy
and publicly affirm their commitment to the organization and its goals.
3.3. Economic principles
The Report and Agreement outline progressive policies that note the
greater resources, technological skill, and the higher rate of emissions
in the more advanced nations. The Report and Agreement call for
commensurately greater obligations on these nations including reduc¬
tions in emissions and the funding and transfer of technology. The goal
of sustainable development is balanced and progressive in the
Agreement: “Developing countries ... are encouraged to move over time
towards economy-wide emission reduction or limitation targets in the
light of different national circumstances.” 43 Developed countries not
only take the lead in financing and enhancing technology transfer, they
“shall continue taking the lead by undertaking economy-wide absolute
emission reduction targets.” 44 As larger emitters with more resources,
they are held to a higher standard.
The policies are market and efficiency-oriented in the sense that,
while goals are set by governments, markets and public-private part¬
nerships are primary vehicles to achieve the goals. 1 They favor effi¬
ciency and renewables for economic reasons. 46 The lower the cost, the
greater the ability to achieve the sustainable development goal. The
Report points to the “need to promote universal access to sustainable
energy in developing countries, in particular in Africa, through the
enhanced deployment of renewables.” 47 The focus on renewables,
which use local resources, also furthers other goals including a desire to
promote the “development and enhancement of indigenous capacities
and technologies. ... Exploring how developing country Parties can take
ownership of building and maintaining capacity over time and
The Trump administration’s complaints go to the core values of the
commitment to manage the resource in a cooperative and progressive
manner and trigger intense rejection by the commoners, making ne¬
gotiations difficult, if not impossible.
43 United Nations, Framework Convention on Climate Change, 2015. Report of the
Conference of the Parties on its twenty-first session, held in Paris form 30 November to 13
44 UNFCCC, Report, 21.
45 Ibid. 23.
46 Ibid. 2.
47 Ibid. p. 3.
48 Ibid. 9-10.
3.4. Vertically supportive polycentric action: local, subnational and regional
Because the Paris Agreement recognizes the need for a consensual
framework in which authority is dispersed, it reaches out to subnational
entities. Although it is typically nation-states that sign treaties, other
governmental entities can have international relationships. The Paris
Agreement gives this aspect as much attention as any other issue it dealt
The Paris Agreement is an Annex to the “Report of the Conference of
the Parties on its twenty-first session.” The Report recognizes and en¬
courages the participation of other entities 31 times including subna¬
tional entities (governmental and nongovernmental) 12 times, and
encourages non-signatories to participate through observer status 12
times. The preamble to the Report and the outreach to non-Party sta¬
keholders suggests the breadth of the effort to stimulate participation
by these entities.
Agreeing to uphold and promote regional and international co¬
operation in order to mobilize stronger and more ambitious climate
action by all Parties and non-Party stakeholders, including civil society,
the private sector, financial institutions, cities and other subnational
authorities, local communities and indigenous peoples. 49
Welcomes the efforts of all non-Party stakeholders to address and
respond to climate change, including those of civil society, the private
sector, financial institutions, cities and other subnational authorities;
Invites the non-Party stakeholders... to scale up their efforts and
support actions to reduce emissions and/or to build resilience and de¬
crease vulnerability to the adverse effects of climate change...
Recognizes the need to strengthen knowledge, technologies, prac¬
tices and efforts of local communities and indigenous peoples related to
addressing and responding to climate change, and establishes a platform
for the exchange of experiences and sharing of best practices on miti¬
gation and adaptation in a holistic and integrated manner. 50
The Agreement identifies local impacts, local knowledge, and local
capacity building as key concerns mentioning the subnational, regional
and non-governmental groups that would not be “parties” to the con¬
vention. These entities are encouraged to provide expertise and parti¬
cipate as observers in meetings." Observer status is defined in terms of
participation and financial relationships. These references are in the
Preamble, and Articles 7, 11, 15, 16 and 18, which constitute one sixth
of the Agreement.
Ultimately, the Parties will define the nature and extent of activities
for these non-Participants, but the language clearly favors more, not
less involvement and engagement by entities. The participants are
much more likely to give the expansion of participation by compliant
observer entities a much friendlier hearing than to the efforts by non-
compliant entities to lower the goal.
On the one hand, the U.S. withdrawal from the Paris Agreement 52
poses a serious challenge to those committed to dealing with climate
change, not only because it would remove the second largest global
carbon emitter from compliance with the treaty, but also because it
could be a blow to the governance model adopted by the Agreement.
On the other hand, the conditional tense is necessary because, it could
also provide an opportunity to advance the legitimacy of the agree¬
ment. The resolve of the community might be strengthened.
49 UNFCCC, Report, p. 3.
50 Ibid. pp. 19-20. Non-Party entities have a separate section and are dealt with in
paragraphs 106-135 of the Report, which constitutes almost a quarter of the Report.
51 UNFCCC, Paris Agreement, Article 8: Anybody or agency, whether national or in¬
ternational, governmental or non-governmental, which is qualified in matters covered by
this Agreement and which has informed the secretariat of its wish to be represented at a
session of the Conference of the Parties serving as the meeting of the Parties to the Paris
Agreement as an observer, may be so admitted unless at least one third of the Parties
Energy Policy 118 (2018) 440-454
particularly if there are subnational units within the U.S. that can and
will comply. A decision to comply by local or regional entities with
energy and climate making authority would send a strong counter
message and could significantly enhance the legitimacy of the Agree¬
This runs into the Trump administration’s idiosyncratic attitude
toward localism, which supports local authority when the locals agree
with it, but opposes local authority when it does not agree. Thus, in the
core economic and political values embodied in the Agreement, there is
a fundamental conflict between the Trump administration and the
principles of the Agreement.
3.5. The third industrial revolution and the emergence of a 21st century
An analogy to the development of the Internet adds depth to the
description of the Paris Agreement and the emerging paradigm in the
electricity sector. In the early 1990s, as the Internet began to move out
of the university and national laboratory environment to penetrate
society more broadly, it was seen as a global common pool resource.
The location of much of the digital revolution (the internet and tech¬
nological development) outside of the state and separate from tradi¬
tional international organizations became a central feature of the in¬
stitutional structure,” 4 although governance challenges were significant
as the digital communications system grew. 55
As the digital economy became pervasive, scholars added two new
types of goods to the typology discussed above. These were based on
extensions of the underlying dimensions of rivalry and exclusion. As
shown in the Table 3, anti-rivalry and inclusiveness were seen to be
characteristics of the new economy giving rise to new types of goods.
The identification of collaborative goods, which exhibit both anti-riv¬
alry and inclusiveness, is particularly important because the economic
characteristics they possess and the processes the new traits trigger give
them an economic advantage.
Anti-rivalry occurs when the use and/or sharing of the production of
the good by one person increases the value to others. Inclusiveness
occurs when the value of a good increases as the number of people
using and/or producing the goods increases.” 57
It can be argued that the emerging 21st century electricity system
exhibits these characteristics, which are identified in bold in Table 4.
While the supply-side resource savings are unique to each resource,
they share economic characteristics. Traditional technological progress
in lowering the cost of electricity from alternative technologies has
been the key launch pad for the transformation of the electricity sector.
However, the ultimate success will depend on the application of in¬
formation, communications and advanced control technologies to
manage the new, more complex system. The dynamic integration of
supply and demand is akin to the idea of torrenting - distributing and
storing resources in the local network, then calling on them in the most
efficient manner when needed with embedded algorithms and knowl¬
edge. The ability to capture these sources of value and efficiency are
made easier because declining communications costs facilitate and
dramatically alter the logic of collective action. Digital communications
facilitate control and integration of diverse elements of the network.
and High Technology Law, 3:1, pp. 133, 138 and applied to the
53 Golick, 1991; Kollach and Smith (1996); Hess, 1995a, 1995b; Bernbom (2000).
54 Mueller (2010); Pavan, 2012; Malkin, 1994.
55 Cooper (2013). As the Internet moved out of the academic world into society,
participation in the governance of its core protocols implemented by the community
through the Internet Engineering Task force, which was conducted through list serves and
open conferences, exploded, doubling in a few years in the early 1990s. To socialize the
mass of new participants a document entitled the “Tao of IETF,” with the hope that “this
will give them a warm, fuzzy feeling and enable them to make the meeting more pro¬
ductive for everyone” (Malik, 1994, p. 1).
56 Weber, 2004, Von Hippie, 2005.
57 Cooper (2006), p. 133.
characteristics of the emerging system as described in Cooper (2017).
The Political Economy of Electricity: Progressive Capitalism and the
Struggle to Build a Sustainable Power Sector (Santa Barbara, Praeger),
Chapters 8, 10, 11. Other, non-digital examples are provided in Mark
Cooper, 2011. Structured Viral Communications: The Political
Economy and Social Organization of Digital Disintermediation. Journal
on Telecommunications and High Technology Law, 9:1
Characteristics that lower transaction costs and increase demand
side value are shared across all resources. The emerging digital system
emphasizes local resources, more local knowledge and local control,
which are clear attributes of the emerging electricity system.
Particularly important is the expanding role of end-users, not simply on
the demand side, but also as producers (self-supplying “prosumers”).
Direct and indirect network effects, also known as demand-side
economies of scale, were seen as extremely important.
In electricity, inclusion of wider geographic areas, complementary
technologies, and participation of more users engaging in flexible
supply and demand enhance system management possibilities. The
large and diverse market makes it possible for firms to find profitable
niches, even with an open source approach to property since valuable
specialization could be built atop shared protocols without under¬
mining interoperability. Giving individuals and system operators a
wider range of options at a local scale allows needs to be met at lower
cost with fewer resources. This transformation of the organizing prin¬
ciples is estimated to yield an integration dividend of 15-20% of system
capacity. This makes complementary resources and integration the
second or third largest “resource” in the new system.
The parallel and complementary development of the energy and
communications sectors is more than a mere analogy. A new techno-
economic paradigm imposes and requires consistency across inter¬
connected economic activities. The penetration of the core logic of the
evolving paradigm into all aspects of the economy to capture the eco¬
nomic advantages they create is to be expected. 5 Moreover, the com¬
munications and energy sector are two of the most important “focal
core resource systems” 59 of any society, so one would expect them to be
organized according to similar principles.
Given the global nature of the resource and the polycentric nature of
policy authority that affect its exploitation, the ability to meet the
challenge of climate change would be enhanced if these characteristics
of the 21st century economy were brought to bear on it.
4. The political economy of compliance: what’s in it for the states
4.1. State actions in support of Paris and climate policy
As noted above, a dozen states immediately informed the White
House that they believed the U. S. should remain in and comply with
the Paris Agreement. In fact, shortly after the Agreement was adopted,
ten of these states joined the Under2 Coalition, which was an im¬
mediate affirmation of the effort of the Agreement to engage organi¬
zations at a variety of levels.
The Under2 Coalition is a diverse group of governments around the
world who set ambitious targets to combat climate change. Central to the
Under2 MOU (Memorandum of Understanding) is an agreement from all
signatories to reduce their greenhouse gas emissions 80-95% below 1990
levels, or limit to 2 annual metric tons of C02-equivalent per capita, by
2050. A total of 170 jurisdictions spanning 33 countries and six continents
have signed or endorsed the Under2 MOU. Together, the Under2 Coalition
represents 1.18 billion people and $27.5 trillion in GDP - equivalent to
16% of the global population and 37% of the global economy.
58 Cooper (2015), and 2017, argue that the two sectors are part of the third (digital)
industrial revolution and rest on similar principles that are reflected in the Paris Agree¬
59 Cooper (2013); Cooper (2016a), presents an analysis of the communications sector
in the same framework used in this paper to describe the electricity sector.
Energy Policy 118 (2018) 440-454
A digital information age view of the 21st century electricity system expanding typology of goods in the 21st century digital economy (new types in bold).
Source: Mark Cooper, 2006, From WiFi to Wikis and Open Source. Journal on Telecommunications and High Technology Law, 3:1, p. 133.
Extent of Rivalry, Subtractability of
Difficulty of Excluding Potential
Public/Private goods Private providers benefit more than free riders, so they
“support open source”
Collaborative goods Network Effects: Direct (users enjoy increased value due
to their expanded Connection (telephone) Indirect network effect - users
benefit because suppliers expand and diversify (software)
Sources of Comparative Advantage of Collaborative Production (Bold entries apply to the emerging 21 st century electricity sector).
Source : Adapted from Mark Cooper, 2006, From WiFi to Wikis and Open Source. Journal on Telecommunications and High Technology Law, 3:1, pp. 133, 138 and
applied to the characteristics of the emerging system as described in Mark Cooper, 2017. The Political Economy of Electricity: Progressive Capitalism and the Struggle
to Build a Sustainable Power Sector (Santa Barbara, Praeger), Chapters 8, 10, 11. Other, non-digital examples are provided in Mark Cooper, 2011. Structured Viral
Communications: The Political Economy and Social Organization of Digital Disintermediation. Journal on Telecommunications and High Technology Law, 9:1
Activity Shared Resource Process Benefits
Supply Side Transformation Resource Savings
Open Source Software
21 st Century
Local & renewable
All Local Knowledge
Demand-Side Value Creation
All Network effects
Embedded Coordination Algorithms
Embodied knowledge in software
Torrenting, Viral communications
Integration of supply & demand with embedded coordination
& embodied local knowledge Using diverse geographic &
technology supply (akin (to torrenting)
Dynamic occupation of spectrum
Exploiting rich information in real time
Reduction in cost and expansion of throughput, broad
Dynamic use of grid & resources storage, exploiting
information (e.g. weather) in real time Reduction in
cost, improvement of throughput
Consumer as producer
Fit Between consumer needs and output improved
Increased option value, supply-Side support for open
source property due to specialization
The Under2 MOU originated from a partnership between California
and Baden-Wiirttemberg with the aim of bringing together ambitious
states and regions willing to make a number of key commitments to¬
ward emissions reduction and to help galvanize action at the COP 21
(Conference of the Parties) Paris Climate Change Conference in
The early leadership role of California is important as it is the most
populous state with the largest state economy by far 6 and one which
has a unique degree of autonomy. The U.S. participants in the Under2
Coalition included two of the largest four U.S. states and the group of
ten U.S. states represented about one-third of U.S. GDP. The German
participation was even more substantial, with all four of the largest
German states and almost three-fifths of the German GDP. 62
4.2. Potentially compliant states as a group
The left side of Table 5 shows the policy positions (inputs) that
identify the potentially compliant states. The final rows on the left side
contrast the policy positions of the potentially compliant states with the
In addition to the Under2 Coalition states, another five states urged
the Trump Administration to remain in the Paris Agreement because
they were feeling the impact of climate change and were making pro¬
gress in responding. Another half dozen states have defended the Clean
Power Plan. In all three of these policy actions, several major cities also
61 Its economy is over 60% larger than the second ranked state (Texas) and seven times
as large as the average state. https://en.wikipedia.org/wiki/List_of_U-S._states_by_GDp P.
joined in. Another important indicator of a willingness to follow ag¬
gressive local climate policies is the participation in the Clean Cars
Program, which is the group of states that follows the California lead on
vehicle emissions. Here the table identifies states that have taken steps
toward joining California standards, but have not joined fully. Finally,
Table 5 identifies the nine states in the Northeastern Regional Green¬
house Gas Initiative (RGGI) and one that withdrew.
While one can debate how many states can comply and/or would
formally seek observer status, the group of potentially compliant states
is substantial. The right side of Table 5 shows some of the key “outputs”
of the policies of the compliant states compared to the non-compliant
states. The potentially compliant states would represent between one-
third and two-fifths of U.S. emissions and more than half of U.S. GDP.
Taken together, these states would rank in the top five globally as “an”
emitter, just behind India, accounting for 6% of global emissions. The
non-compliant states would still be the second largest emitter, below
The share of emissions of the potentially compliant states is much
smaller than their share of population and economic activity. This re¬
flects both the nature of economic activity in the states and the track
record of reducing energy consumption and emissions. As shown in
Table 5, the potentially compliant states have much higher rankings on
efficiency in utility, buildings, transportation, solar, corporate and
overall clean energy policy. Their efforts to promote renewables are
much more aggressive, with higher targets for utilities to include in
their resource mix, i.e. Renewable Portfolio Standard (RPS). The RPS
targets in the potentially compliant states are three times as high as the
63 Based on 2016 shares of C02 emissions, https://www.statista.com/statistics/
Energy Policy 118 (2018) 440-454
The war between compliant and non-compliant U.S. states reproduces The U.S. war against the world.
Sources: Under2 Coalition, http://under2mou.org/coalition/; Chris Mooney and Brady Dennis, “Even in states suing over new climate regulations, coal use is
shrinking,” Washington Post, May 3, 2016, https://www.washingtonpost.com/news/energy-environment/wp/2016/05/03/nearly-every-state-suing-over-obamas-
climate-plans-is-burning-less-coal-anyway/?utmJerm= .617eaffe2859; Brent Kendal, “Coalition of 18 States to Move to Defend Carbon-Emissions Rules: Group
expected to ask court to intervene in lawsuit challenging greenhouse-gas regulations. Wall Street Journal, Nov. 4, 2015; http://www.wsj.com/articles/coalition-of-18-
states-to-move-to-defend-carbon-emissions-rules-1446613261; US Environmental Protection Agency, "U.S. Greenhouse Gas Inventory Report: 1990-2014," 2015;
U.S. Department of Commerce. Bureau of Economic Analysis. Gross domestic product (GDP) by state, 2015. United States Census Bureau. “National Totals: Vintage
2015, 2016; Netherlands Environmental Assessment Agency. C02 time series 1990-2014 per region/country, 2015; ACEEE, State Energy Efficiency Scorecard, 2016,
http://aceee.org/state-policy/scorecar; Solar Power Rocks. Com, 2016 United States Solar Power Rankings, https://solarpowerrocks.com/2016-state-solar-power-
rankings/; Clean Edge, Corporate Clean Energy Procurement Index, State Leadership & Ranking 2016, 2017 U.S. Clean Tech, Leadership Index: State and Metro, May.
Jocelyn Durkay, State Renewable Portfolio Standards and Goals, National Conference of State Legislatures, December 28, 2016, http://www.ncsl.org/research/energy/
State Compliant v. Non-Compliant State Policy Inputs Compliant v. Non-Compliant State Outputs
% of GHG
% of GDP
% of Production
other states. All but one of the 22 states with a high probability of
compliance, based on the efficiency/solar rankings, have an RPS.
Among those states the range is 10-65% by 2025, with that average
RPS target is in the range of 30%. The one state without an RPS (Iowa)
already exceeds the average targets for the other states, which is at
Among the states that are not good candidates for compliance, en¬
ergy policy is much less friendly to efficiency and renewables. Almost
half have no RPS and the average target for the RPS for the non-
compliant group is less than 10%. Average energy consumption in the
non-compliant states is almost 60% higher than in the compliant states,
even though the latter have much higher incomes. While a variety of
factors can contribute to this difference, the noncompliant states pro¬
duce more fossil fuels, consume more and do not try as hard to lower
consumption. In terms of electricity consumption, the potentially
compliant states are much closer to the more efficient advanced in¬
dustrial societies that are supporting the Paris agreement.
The most striking difference between the potentially compliant and
non-compliant states is in their fossil fuel resources. The states identi¬
fied as potentially compliant account for a much smaller share of fossil
fuel production than the non-compliant states; 14% v. 57% of oil, 17%
v. 82% of coal and 25% v. 70% of gas output. Clearly, they would be
much better off pursuing non-fossil fuel approaches. Interestingly, the
distribution of production from renewables is much more evenly split
with the potentially compliant states accounting for 60% of non-hydro
renewables. The non-compliant states have chosen not to develop their
renewable resources or to control their demand growth, but they have a
substantial share of non-hydro renewables because their resource base
is substantial and the cost is very attractive. 64
To underscore the political economy of these differences domes¬
tically, whereas nine-tenths of the non-compliant group sued to block
the CPP, three-quarters of the potential compliant group intervened to
defend it. With respect to the Paris Agreement, Republican House
members from nine states 65 and Senators from 5 states 66 introduced a
resolution calling on the Trump Administration to withdraw from the
Paris Agreement, followed by a letter from Republican Attorneys Gen¬
eral from 10 states. 67 Two-thirds of the non-compliant states were re¬
presented among those calling form withdrawal. On the other side, 40
Democratic senators sent a letter urging the administration not to
withdraw, 68 along with the governors from 12 states. 69 Five-sixths of
the potentially compliant states were represented among those op¬
posing withdrawal. Michigan, Pennsylvania and Wisconsin, widely seen
as “battleground” states, were represented in both groups. These three
states generally sat in the middle on the policy measures even though
64 Several of the non-compliant states have rich renewable resources whose current
costs are quite low - particularly onshore wind - so they have exhibited significant de¬
velopment of those resources (e.g. Texas, Oklahoma) but fossil-fuel interests are much
larger. In the case of Trump’s Secretary of Energy, former Texas governor Rick Perry,
whose tenure had seen a huge expansion of wind power, the Trump Administration’s
policy created a bit of a contradiction), particularly with respect to the expansion of the
grid to accommodate wind (Thinkprogress, 2017; Tomich, 2017; Marshall, 2017).
65 Quinones (2017).
66 Hess (2017n).
67 Siciliano (2017).
68 Senate Democrats, 2017.
69 Hess, 2017.
Energy Policy 118 (2018) 440-454
Pennsylvania has fossil fuel resources. Republican governors from
Vermont and Massachusetts, two of the highest performing potentially
compliant states, also argued against withdrawal. 1 Thus, this is not a
war against coal, but a battle between two very different paths to the
future, and the battle lines are sharply drawn. '
Many of the potentially compliant states have expended consider¬
able political, policy, and legal resources to take these state policy ac¬
tions that are likely to lead to compliance, so why go to the trouble?
There are political reasons and as suggested above, the potentially
compliant states have a direct interest in relying on local resources, but
there are many more economic reasons.
First, a massive and growing number of economic entities within
and outside of the energy sector are acting on this belief. The com¬
mons literature teaches that responding to the externality does not re¬
quire altruism, but a recognition of self and shared interests and an
acceptance of responsibility.
Second, the benefits of carbon emission reduction, which are very
diffuse owing to the truly global nature of the problem, are not the only
public health benefits. Replacing fossil fuels reduces emissions of local
and regional pollutants. A recent estimate for the states participating in
the Regional Greenhouse Gas Initiative (RGGI) a multistate agreement
in the Northeastern U.S. to promote reduced emissions with a cap on
emissions that allows trading of emission permits, is pertinent here
because the participating states make up a significant part of the po¬
tentially compliant group. The analysis puts the value of non-carbon
pollution reduction at just under $6 billion, which pays for the entire
cost of RGGI. In the Jacobson, et al. analysis of a 100% renewable
sector, the non-carbon environmental benefits are larger than the cli¬
mate change related benefits.
Third, a technological revolution has made acting like a responsible
user of the commons much easier with a dramatic decline in cost of low
carbon, low pollution approaches to meeting the need for electricity on
both the supply and the demand side/ There is a widespread and
growing understanding that the main building blocks of the alternative
electricity system, efficiency, onshore wind, utility photovoltaics, and
storage are already cost competitive with conventional fossil fuels and
much lower in cost than new or aging nuclear technologies. 80 Cost
trends suggest that the palate of cost competitive options is expanding
quickly. The Trump Administration’s effort to expand the use of fossil
fuels is widely seen as misguided and doomed to fail in the face of the
70 Georgetown Climate Center (2017).
71 Mark Hensch, “Pence: Trump will ’end the war on coal,”’ The Hill, October 8, 2016,
72 Cooper (2017), Chapter 8.
73 The diametrically opposed comments of California and Texas filed in response to an
EPA request for suggestions on how to revisit Obama EPA standards adds another di¬
mension (Reilly, 2017b). These are the two largest states in the potentially compliant v.
non-compliant groups and they are as different as night and day in their energy policy,
resource endowments, and reliance on renewables. Texas accounts for over one-third of
U.S. oil production, over one-quarter of natural gas production, and one-twentieth of coal
production. California accounts for just over one-twentieth of U.S. oil production and
virtually no gas or coal production.
74 Trabish (2017a, 2017b, 2017c), Bade (2017a) (2017b); Fresh energy (2016).
75 Moody’s (2017), Cusick (2017b); Casey (2017).
76 Over two-thirds of the Under 2 group, half of the Pro-CPP group, and two-fifths of
the max potential group.
77 Abt (2017).
78 Jacobson et al., 2015a, 2015b, present results for 139 nations; while 2015b, presents
results for all 50 states.
79 Cooper (2017), Part III.
80 Combining non-carbon health benefits of reduced reliance on coal with direct
pocketbook cost savings (RGGI, The Investment of RGGI Proceeds through 2014, September
2016), which are both driven by energy efficiency, yields a benefit cost ratio of just under
3.5-to-l, without include any value for reduce carbon emissions.
dramatically superior economics of the alternatives and the global shift
away from fossil fuels. 81
Fourth, cost competitive alternatives and local resource reliance and
development highlight another attractive economic characteristic for
the potentially compliant states - macroeconomic gains. The alter¬
natives, particularly efficiency and solar PV, are widely recognized to
deliver more jobs and bigger gains in economic output per dollar of
investment/expenditure. 82 For every dollar of direct cost savings, there
is a second dollar of increased, indirect economic output. The impact
is magnified since these resources are local, 84 which is the fundamental
premise of the Paris Agreement.
Fifth, the economic benefits will be magnified with larger numbers
of states complying. Economies of scale and learning will be greater if
the total market is larger. The coordination of resources in general and
across the interstate grid (if federal authorities allow renewable/de¬
mand side friendly policies) is an important factor that affects the
economics of the alternative system. Similarly, a global market would
lower input costs and increase output opportunities. Consumption ex¬
ternalities are also important, particularly for natural gas and oil. The
greater the reduction in consumption, the greater the downward pres¬
sure on prices, thus increasing the disposable income of households.
Politics and policy: public opinion and federalism
From a political perspective, the growing acceptance of climate
change as a problem is a central political fact. First, concern about the
causes and consequences of climate change has grown to near unani¬
mity in the scientific community. Second, a substantial and growing
majority of the public believes the problem is large and in urgent need
of a solution. This majority was manifest in every state and across po¬
litical lines. 86
Beyond the Paris Agreement, the early energy headlines tended to
be dominated by the electricity sector because of the Trump
Administration’s focus on promoting coal and expunging it nemesis, the
Clean Power Plan. However, the transportation sector witnessed a si¬
milar debate with respect to petroleum use. Not only had transportation
become an equal source of greenhouse gas emissions in the U.S., 85 but
the federal-state line of conflict was highlighted in this sector.
The dilemma has a specific manifestation under U.S. the Clean Air
Act, one of the primary drivers of U.S. climate policy and it puts a
spotlight on California, which is justified. Not only is California large,
but it also has a unique role in environmental policy and the conflict
with the Trump Administration gave it great prominence. As reported
in a front-page New York Times story on the eve of the G-7 meeting that
had been identified as the key moment for the Trump Administration’s
decision on Paris, “California is not only fighting to protect its legacy of
sweeping environmental protection, but also holding itself out as a
81 Hess, 2017h; Chemnick (2017i); Moody’s (2017) Coal, Oil, Nuclear (Cooper, 2012b,
2016c; Cooper, 2014; Hwang and Peak, 2006; International Council on Clean
T r ansportation).
82 Cooper (2017), Part III, p. 117 shows social producing about nine-times central
station generation (gas, coal and nuclear) and efficiency almost four times (Lavelle,
83 The multiplier effect of “respending” the money saved on use of more efficient
equipment has been extensively studied (see Ryan and Campbell, 2014; Volkery, 2013;
Holmes and Mohanty, 2012. Lutz, Lehr and Pehnt, 2012; Wei, Patadia and Kammen,
2010. Frondel et al., 2009). Less often studied, but equally important are the ways in
which the adoption of energy saving technologies (frequently instigated by policies like
standards) drives innovation more broadly in the affected industry (International Council
on Clean Transportation; Whitefoot, Fowler and Skerlos, 2012; Dale et al., 2009; Kuik,
2006; Sperling et al., 2004; Worrel et al., 2001).
84 For European nations, where fossil fuels are frequently imported, the literature
emphasizes reduction of imports as a national security, competitiveness and economic
benefit. This provides context for the potentially compliant states that have relatively
little fossil-fuel production.
85 Cooper (2016b), discusses ten years of polling on fuel economy standards which are
by far the most important energy efficiency standards, although lighting is becoming a
huge source of conservation due to the growth of LED lighting (Davies, 2017).
86 Davenport and Connelly (2015); Marlon et al. (2017). Nace (2017).
87 Randall, 2017.
Energy Policy 118 (2018) 440-454
model to other states - and to nations - on how to fight climate
Under a 40-year old amendment to the Clean Air Act, the state of
California has the right to issue its own standards, subject to the
granting of a waiver from the Federal government. 7 If California and
the Federal government adopt different standards, individual states can
choose which standard to follow. This allows for a federal or state so¬
lution, while compelling the industry to comply with at most two
California had been granted a waiver by the federal government to
regulate emissions from vehicles and had led the Clean Cars Program.
Shortly after the start of the 21st century, California had adopted a Low
Emission Vehicle (LEV) standard. A dozen states had chosen to follow
California, which made the coalition of Clean Cars states the fifth or
sixth largest auto market in the world. Over the objection of the auto¬
makers, one of the primary impacts was to create a market for hybrid
vehicles. Although the hybrid had started as a niche product, a decade
and a half later it was mainstream, with every automaker who offered a
full line of vehicles marketing hybrid for each of the main models that
consumers drive (small, medium and large cars as well as SUV). ’ 1
The Obama Administration ordered the federal agencies responsible
for auto standards - the Environmental Protection Agency (EPA) and
the National Highway Traffic Safety Administration (NHTSA) - to co¬
operate and coordinate with California, i.e. the California Air Resource
Board (CARB). It can be argued that this was a good example of co¬
operative federalism by the administrative bodies with the responsi¬
bility for setting policy. 92
The National Program that they arrived at to set standards for
2017-2025, was the most aggressive in U.S. history. Moreover, nine
states had chosen to follow the California Zero Emission Standard,
which will require significant penetration of electric vehicles. At the
end point, for the first time ever, the U.S. standards would have been
close to the standards imposed by other major vehicle market nations.
Because the National Program was a long-term program, it involved
a mid-term review. EPA and CARB had determined that the rule should
stay in place, but NHTSA had not. 93 The Trump Administration with¬
drew the EPA determination and opened a full-scale review, while
CARB not only supported the existing rule, but also proposed more
stringent regulation for the 2025-2030 period. Battle lines were quickly
drawn, as the automakers, who had overwhelmingly supported the
National Program, were the first sector to reach out to the new Ad¬
ministration to ask for relaxation of regulatory requirements. , ! As
noted above, the Trump Administration withdrew the EPA’s final de¬
termination to keep the standard and was considered withdrawing the
Another important field of battle is energy efficiency policy. This is
not only likely to be one of the centerpieces of climate policy, but in the
U.S. it enjoys a remarkable tradition of bipartisan support that stretches
back almost fifty years. 95 The federal government has pre-empted state
action on efficiency standards, where the federal government has
88 Davenport Nagourney (2017), p. A-l; Reuters (2017c); Leslie (2017).
89 Reilly (2017a, 2017b, 2017c); Reuters (2017c); Davies, 2017; Chemnick, 2017o.
90 The ownership rate of electric vehicles in California is over six times the national
91 Cooper and Gillis (2017), Attachment II (Smiechowski, 2014).
92 There was considerable debate about what the concept meant and whether some
states wanted more responsibility (Kahn and Mulkern, 2017).
93 NHTSA was legally obligated to conduct a second complete rulemaking; the other
agencies were not (Cooper, 2012a).
94 Henry (2016), reporting letter to the White House two days after election day.
Another letter was sent on February 10, 2017.
95 Nine of the ten major pieces of legislation mandating increases in energy efficiency
were signed by Republican presidents. At least sixty percent of every house of Congress
has voted in favor this legislation on final passage and, on average in over a dozen votes,
over 85% of the member of congress supported enactment of legislation that authorized
regulation to improve energy efficiency (Global Automakers, 2017; Williams, 2017).
enacted a standard. 16 Nevertheless, efficiency standards were a primary
target of the conservative think tanks. The Trump Administration
issued both specific and general attacks on standards with an executive
order to review all standards and a severe limit on the conditions under
which new standards could be issued.'
Thus, potentially compliant states have a clear political interest in as¬
serting and preserving their right to act independently, not to mention a
strong economic interest in moving policy in a direction that serves their
direct economic interest and the interest of the participants in the global
Ultimately, the debate over U.S. participation is at best a distraction, at
worst a scam. It is not participation that matters, but compliance. Common
pool resource systems rely on voluntary compliance induced by social pres¬
sures. Having point to the fundamental conflict between the Trump
Administration and the participants, one would expect continued and in¬
tensified conflict as the Agreement was implemented. This is what took place
4.5. Subnational U.S. entities
The subnational entities in the U.S. have been extremely active in ex¬
panding their base and demonstrating their resolve. 9 “Official” support in¬
creased to majority levels and became a selling point to reassure the parti¬
cipants. 101 ' Thirteen of the 22 potentially compliant states are officially on
record as supporting. Another four have major cities supporting (Dubuque,
LA; Chicago, IL; Santa Fe, NM; Philadelphia, PA,). Three more that have not
specifically supported the Agreement are deeply involved in supporting other
activities. Clean Cars, RGGI and the CPP (Maine, MD, NH). New Jersey was
RGGI and is in Clean Cars. Michigan is the only outlier. North Carolina signed
on in support. The original list of potentially-compliant states is affirmed by
At the same time, the dispute over the Agreement has solidified a
potentially larger base of support, with major cities in a dozen other
states declaring support (Phoenix, Tucson, AZ; Fayetteville, Little Rock,
AR; Miami, St. Petersburg, West Palm Beach, Orlando, Tallahassee, FL;
Atlanta, GA; Kansas City, KS; St Louis, MO; Reno, NV; Columbia, SC;
Nashville, Knoxville, TN; Dallas, Houston, Austin, TX; Salt Lake, Park
City, UT; Milwaukee, WI). Analysis by America’s Pledge puts the GDP of
the “officially” supporting entities well above half of the U.S. total.
Combining the “official” count with the potentially compliant list,
would push the total to close to 60% of the U.S. economy.
At COP 23, the non-governmental participants expected a larger
voice and the leadership has been treated as equals, suggesting in¬
novative ideas, e.g. a global carbon market, zero growth in the transit
sector, as well as picking up the tab for the U.S. share. 11 A variety of
benefits of support were touted including economic benefits 1 ' in
96 Important energy policies, like building codes, utility efficiency programs and re¬
newable portfolio standards are state-based.
97 American Action Forum (AAF), 2017, identifies over 1100 rules as imposing ex¬
cessive costs of over $1.2 trillion. Of these about one quarter of energy efficiency stan¬
dards which account for almost half of the total cost. The calculation measures costs, not
benefits Hess, 2017b.
98 The AAF approach was taken by the Trump Administration Executive Orders of
reducing regulation and the imposition of a regulatory budget, an approach that was
severely criticized by 95 regulatory experts, led by a pro-market think tank, Lin and
Krupnick (2017); Cooper, 2014.
99 Wattles (2017); U.S. Climate Action Center, 2017; We Are Still In (2017); Hensen
(2017), Stupp (2017).
100 E&E News, 2017a, 2017b, 2017c, 2017d, 2017e, 2017f, 2017g; U.S. Climate Action
Center; U.S. Climate Alliance, 2017; United States of America, 2017.
101 Maryland added its name to the list in early 2018, Dance (2018).
102 Stupp (2017), America’s Pledge (2017), Wattles (2017).
103 Gilpin (2017), Lee and Klump, 2017, McKenna (2017), Hess, 2017m.
Energy Policy 118 (2018) 440-454
general and specific states, 11 and political benefits, supported by the
polling result. 105 The flood of commitments from industry cannot be
overlooked, particularly the increasing commitment to electrify the
transportation sector. 106
4.6. The Trump administration
The Trump administration made it clear that it would not be pres¬
sured into complying in the cooperative manner of the Agreement. The
hostility of the administration to multi-lateral agreements, not to
mention polycentric governance, suggests that it will simply not con¬
tribute to the emergence of consensus and norms. The Trump
Administration’s rejections of a progressive obligation, in spite of the
fact the U.S. is one of the wealthiest nations and one of the largest
emitters on a per capita basis, highlights the conflict with the central
premise of the Paris Agreement’s progressive mechanism for achieving
development with decarbonization.
At COP 23, the Trump administration simply reiterated its initial
position, no matter what developments are. As the senior administra¬
tion official put it. “There has been no change in in the United States
Position on the Paris Agreement. As the President previously stated, the
United States is withdrawing unless we can re-enter on terms more
favorable to our country.” 10 Having done so, it lost its influence over
the process. Looking at the actions of the other two sets of actors, one
can argue that the U.S. quickly became isolated, confused and irrele¬
vant, exactly what those in the administration who had argued for
participation had feared.
The isolation can be seen in a number of ways, some by choice,
some by action of others. The U.S. had no pavilion, which the subna¬
tional U.S. entities had a prominent pavilion right outside the gate.
The U.S. was not invited to a follow up meeting in Paris. 1 ' Syria signed
the Agreement on the eve of COP 23, leaving the U.S. as the only
member of the U.N., not supporting, a fact that was repeated loudly and
frequently. 111 ’
The confusion and, consequently, weakness in the U.S. position was
evident at COP 23 and in key policy areas leading up to it. Mixed
messages were sent at the meeting in terms of the depth of the hostility,
if not the direction of U.S. policy. 111 This paralleled analysis coming out
of the administration, which seemed to show, contrary to its policy, that
climate change was having an impact. 2 The difficulty in arriving at
policy conclusions, much like the “toing and froing” over participation
dogged the administration, including problems with implementing
subsidies at the FERC and the repeal of the Clean Power Plan. The
courts got in the way of other decisions, one of particular importance
being the effort to roll back regulations on methane. 11
To be sure, the Trump administration had the capacity to create
pressure in the direction it wanted the U.S. to go by pushing subsidies
for fossil fuels, reducing subsidies to alternatives or putting tariffs on
the importation of equipment, 1 lowering or eliminating the size and
use of the social cost of carbon in policy analysis, and eliminating the
conduct of research or the dissemination of its results. 115 In a sense,
104 Rahim (2017), renews, 2017.
105 Marlon et al. (2017).
106 With the major Asian automakers asking California to use the money from the VW
settlement of fraudulent test results to expanding charging stations, which would support
it Zero Emission Vehicle program.
107 Siciliano (2017). The President reaffirmed this position several month after COP 23
108 Delurey (2017).
109 E&E News, 2017a, 2017b, 2017c, 2017d, 2017e, 2017f, 2017g; Browne, 2017.
110 Stupp (2017); Siciliano (2017).
111 Friedman (2017c).
112 Shankman, 2017a, 2017b, 2017c; Cushman (2017); Energy.Gov, 2017; Freidman,
113 Friedman (2017e).
114 Restuci and Palmer, 2018.
there was a standoff between the power of the federal government and
state and local governments.
For the Parties to the Agreement, the point had been made that the
U.S. position was divided and far less threatening than an uncontested
symbolic act of withdrawal would have been. The Trump administra¬
tion may have its hands tied and be stuck with a very significant part of
the U.S. acting independently under American Federalism and its own
rhetoric about local autonomy interacting with the Agreements strong
commitment to subsidiarity and sub national and non-governmental
4.7. The participants
The pattern of reactions has become clear. Participants pat them¬
selves on the back, while activists and scientists complain that progress
is not fast enough. 16 Success, like beauty is in the eye of the beholder,
especially in a process including almost 200 nations with goals across
The parties responded to the U.S. withdrawal by continuing their
rejection of the U.S. claims 1 and vigorous competition for global
leadership between advanced industrial nations, with China and
India “stepping” up with more vigorous reduction commitments, 11 and
efforts to coordinate and build leadership showing no signs of
abating. While the activity around the U.S. withdrawal were largely
at the level of defending constitutional and choice rules, the main focus
of COP 23 was very much at the level of operational rules. Three things
are clear from the self-evaluations.
First, subnational entities were a focal point of attention. Of four¬
teen major accomplishments singled out, almost half dealt with sub¬
national and non-participant entities. Table 6 shows the description
offered for the four most prominent of these.
Second, the U.S. presence at the subnational level is acknowledged.
America’s Pledge was listed in the coordination accomplishments and
three of the four corporation singled out for corporate emissions cuts
were American. U.S. participation was also clear in the cities and be¬
yond coal activities.
Third, a clear effort was made to build an institutional history and
identity by linking accomplishments back to the Marrakech meeting
and commitment, which were non-Party oriented. 1 The claimed ac¬
complishments include coordination of non-Party action with the
Agreement, expanding action by subnational entities, business trans¬
formation and improved reporting.
Focusing on a pariah challenge and positive developments makes
sense in the early days, but a day of reckoning is likely to come. Sticking
with positive measures, it would be possible to craft a set of rules that
allows compliant, subnational entities (state and local governments,
corporations and civil society groups) to participate in the substantial
flows of resources that the global response to climate change is likely to
create. Non-participants and non-compliant entities could be fore¬
closed. In a sense, this is the second step in a scheme of graduated
sanction (i.e. rewarding good behavior). Negative sanctions, like taxes
and carbon intensive products could also be adopted.
A successful reaction to the threat of U.S. withdrawal from the
treaty, or the steadfast resistance of subnational units to the effort of the
115 Plummer, 2017, Cushnman, 2017, Heikkinen and Kaenel (2017).
116 Euronews (2017).
117 Chemnick (2017a); Sengupta, 2017; Mulkern (2017).
118 Sengupta, 2017; E&E News, 2017a, 2017b, 2017c, 2017d, 2017e, 2017f, 2017g;
119 E&E New, 2017a, 2017b, 2017c, 2017d, 2017e, 2017f, 2017g; Sengupta, 2017.
120 McDonald (2018).
121 UNFCC (2017a).
Energy Policy 118 (2018) 440-454
Local and Non-Party Accomplishment of COP 23.
Source : United Nations, Framework Convention on Climate Change (UNFCCC),
(2017b), Key Achievement from COP 23, November, 18.
2018 Talanoa Dialogue: After extensive consultations, the Fijian COP23 Presidency
announced an inclusive and participatory process that allows countries, as well
as non-state actors, to share stories and showcase best practices in order to
urgently raise ambition - including pre — 2020 action - in nationally determined
contributions (NDCs). This is ultimately to enable Parties to collectively move
closer to the more ambitious Paris Agreement goal of keeping the rise in global
temperature to 1.5 degrees Celsius.
Finalisation of the Local Communities and Indigenous Peoples Platform: This
platform will provide direct and comprehensive means to give a greater voice to
indigenous people in the climate negotiations and allow them to share their
traditional knowledge and best practices on reducing emissions, adapting to
climate change and building resilience.
America’s Pledge: A delegation of sub-national leaders led by Gov. Jerry Brown of
California and former New York City Mayor Michael Bloomberg presented a
report on the ongoing efforts by American states, cities, businesses and civil
society to uphold the emissions reduction target of the United States under the
Bonn-Fiji Commitment: Local and regional leaders gathered to officially adopt the
Bonn-Fiji Commitment of Local and Regional Leaders to Deliver the Paris
Agreement at All Levels, a pledge that signals their commitment to bring forward
a critical shift in global development. The Bonn-Fiji Commitment highlights the
pledge to raise collective ambition for climate action.
First Open Dialogue between Parties and Non-Party Stakeholders: The Fijian
COP23 Presidency presided over the first ever Open Dialogue between Parties
and Non-Party Stakeholders (NPS) within the formal climate negotiations.
Discussions were held surrounding two important topics. The first was how NPS
can help Parties design and implement more ambitious NDCs and the second was
how to better integrate NPS into the climate negotiations process. Based on the
success of the dialogue, there was strong enthusiasm to continue similar
discussions at future COP meetings.
Trump Administration to undermine the goals and collaborative model,
might provide a critical test that enhances the efficacy and legitimacy of
global climate policy. Looking back several decades, this could be seen
as a critical juncture or a turning point on the path to a successful re¬
sponse to the challenge of climate change. Acemoglu and Robinson use
the former term and Perez uses the latter to describe these moments
in the development of an economy. These critical junctures or
turning points have been historically marked by intense conflict, as the
interests grounded in the declining techno-economic paradigm can see
that, if the economy continues in the ongoing direction, their skill sets
and assets will be severely devalued and their power diminished. This is
the moment to fight a rearguard action and use policy to reverse the
direction of change. These authors argue that rejecting the past and
turning policy in a progressive direction have been the keys to success.
They hasten to add that the outcome is far from certain. Needless to say,
this moment and the conflict between the participants and the Trump
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