Event Recap

As the United States transitions to a Republican administration and Congress, most observers are expecting a significant shift in U.S. energy and climate policy in the coming years. To help understand what we can expect, the Energy Policy Institute at the University of Chicago and the University of Chicago Law School hosted two senior George W. Bush Administration officials, James Connaughton and Jeffrey Holmstead, on December 5th for a conversation on the possible changes. The panel was moderated by EPIC’s executive director Sam Ori and also included Michael Greenstone, the Milton Friedman Professor of Economics and director of EPIC. UChicago Provost Daniel Diermeier welcomed the audience, and University of Chicago Law Professor Mark Templeton helped to frame the discussion.

In the panel, both Connaughton and Holmstead agreed that the main focus over the next four years will be on regulatory improvement. That includes simply making the hundreds of mandates, incentives and government programs on the books more efficient, as well as rolling back the ones that are too aggressive. Holmstead, who served as assistant administrator at the Environmental Protection Agency’s Office of Air and Radiation from 2001 to 2005 and worked heavily on the Clean Air Act during that time, cited the Act as one example. He noted that we could be paying less for the same air quality or paying the same amount for cleaner air. Greenstone agreed, saying that there are a lot of ways to reform our environmental goals. Market-based approaches in particular would allow us to get more environmental bang for the buck, he said.

How the nation goes about regulating carbon emissions is another area Holmstead and Connaughton, the former director of the White House Office of Environmental Policy, feel needs improvement. Connaughton pointed out, however, that there is some consensus that carbon emissions should be reduced. He said the failure to assign a number to that reduction has forced the country to adopt sectoral-based policies that are inefficient. Holmstead agreed that there should be a new approach, including in replace of the Clean Power Plan, which he believes goes beyond the EPA’s authority. He suspects it will not be that difficult to revoke the Clean Power Plan, and that revoking it is indeed high on the new administration’s list of priorities. But, Holmstead cautioned, that doesn’t mean the United States shouldn’t regulate carbon at all, as some Republicans believe.

This brought the panel to a discussion on cost. Greenstone pointed out that other ways to reduce carbon are costlier. Under the Clean Power Plan, it costs just $29 to remove a ton of carbon from the air. The government estimate of how much a ton of carbon should cost (the social cost of carbon) is $40 a ton. Meanwhile, Connaughton pointed out that all the policies that have actually passed at the federal and legislative levels have all been more expensive. To remove a ton of carbon from the air by using solar energy it costs about $400 a ton. Wind energy costs about $200 a ton. Holmstead said that is why he believes the Congress and Administration will focus less on reducing carbon through new regulations, and more on research and development into making low- and no-carbon sources less expensive.

Overall, Connaughton believes there will be progress on the energy and environmental front in the coming years, noting that some of the biggest actions have tended to come under Republican administrations. Holmstead also sees opportunities for progress, provided thoughtful changes are made.

Agenda

Welcoming Remarks

Introductory Remarks

Panel

James Connaughton, President and CEO, Nautilus Data Technologies; Former Chairman, White House Council on Environmental Quality; Former Director, White House Office of Environmental Policy

Jeffrey Holmstead, Partner, Environmental Strategies Group (ESG), Bracewell LLP; Former Assistant Administrator, Office of Air and Radiation, U.S. Environmental Protection Agency (EPA)

Michael Greenstone, Milton Friedman Professor in Economics, the College, and the Harris School; Director, EPIC

Moderator: Sam Ori, Executive Director, EPIC

Areas of Focus: Climate Change
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Climate Change
Climate change is an urgent global challenge. EPIC research is helping to assess its impacts, quantify its costs, and identify an efficient set of policies to reduce emissions and adapt...
Climate Law & Policy
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Climate Law & Policy
As countries around the world implement policies to confront climate change, EPIC research is calculating which policies will have the most impact for the least cost.
Energy Markets
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Energy Markets
Well-functioning markets are essential for providing access to reliable, affordable energy. EPIC research is uncovering the policies, prices and information needed to help energy markets work efficiently.
Fossil Fuels
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Fossil Fuels
Under current policies, fossil fuels will play an important role in the energy system for the foreseeable future. EPIC research is exploring the costs and benefits of these fuels as...
Renewable Energy
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Renewable Energy
Lower technology costs and supportive public policies are driving an increase in renewable energy in markets around the world. EPIC research is assessing the costs, benefits, and efficiency of policies...
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Well-functioning markets are essential for providing access to reliable, affordable energy. EPIC research is uncovering the policies, prices and information needed to help energy markets work efficiently.