Conclusion

This chapter reviews the theory of normative reframing that is at the heart of the book’s explanation for sudden policy change, and the evidence of normative reframing’s role in the unprecedented policy shift toward auctioning emissions allowances from 2008-2015. It then offers some concluding thoughts on the wider implications of the expansion of auctions since RGGI, and the theory of normative reframing for climate and environmental policymaking, as well as for understanding sudden policy change in general. In particular, the chapter concludes that the choice of how to distribute benefits from future climate policies will be the most important factor determining the political success of those policies, and that policies such as cap and trade with auction using public benefit framing remain the most promising policy option going forward.

Normative Reframing and the RGGI Revolution

This chapter provides a detailed analysis of the multi-year design process leading to the implementation of the Regional Greenhouse Gas Initiative (RGGI) in 2008. It considers the question: How did RGGI’s policy designers succeed in auctioning virtually all of the program’s emissions allowances, wheresimilar efforts to promote auctions failed? After reviewing the limits of existing explanations of RGGI’s decision to auction allowances that are grounded in the interest group politics model, the chapter offers a detailed analysis of the RGGI design process to demonstrate the central role of the new public benefit model in making auctions politically viable. Public and private accounts confirm the prominence of this new normative framing for auctions from the very beginning of the process, and its influence over the political choice to make this policy change.

Economics Is Not Enough: The “Old Model” of Cap and Trade

This chapter describes the “old” model of cap-and-trade policy design that largely controlled emissions trading policy from its origins in the 1970s through the 1990s, under which emissions trading programs were adopted reluctantly, and “grandfathered” emissions allowances to current emitters at no cost. It also describes some important events starting in the 1990s that helped lay the groundwork for the sudden switch to auctions in RGGI, including: greater attention to allocation rules by political actors, new precedents such as spectrum rights auctions and severance taxes on some nature resources, new political and economic pressures from electricity deregulation, and the emergence of “public benefit” charges and programs to improve energy efficiency for consumers. In addition, this period saw the emergence of new polluter pays and public ownership normative frames in the context of emissions allowances. At the same time, the chapter documents how these initial changes were insufficient to successfully promote allowance auctions in the development of two prominent cap and trade programs: the initial phase of the EU ETS from 1998-2005, and the NOx Budget emissions trading program from 1994-2005.

Introduction

This chapter introduces the main argument of the book: that the decision in RGGI to “reclaim the atmospheric commons” on behalf of the public by auctioning emissions allowances for the first time was possible due to a new normative frame promoted by environmental advocates. This new “public benefit” frame incorporated polluter pays and egalitarian norms to create a new policy design for auctions that paid greater attention to the distribution of the value of those allowances to the public at large. Taken together, this new frame and associated policy design constituted a new “public benefit model” for climate policy stressing the importance not only of making polluters pay, but also of dedicating those revenues to programs that benefit the public directly, such as subsidies for energy efficiency improvements or direct bill rebates. Using this new public benefit frame and policy design, change advocates were able to promote auctions successfully in RGGI in a surprising policy reversal from long-standing practice of giving such allowances away for free to powerful economic interests.

Other Applications of the Public Benefit Model and Normative Reframing

After RGGI’s implementation in 2008, a series of political set backs led some to declare cap and trade “dead.” This chapter rejects the asserted demise of cap and trade, arguing that the public benefit model for climate policies offers the best hope for political progress. The chapter reviews post-2008 climate policies, noting thatdespite a few prominent failures,cap and trade with auction has become the most common approach to addressing climate change. In addition, the chapter documents how three policies—the EU ETS, California’s cap and trade program, and RGGI—used the public benefit frame to resist political challenges and strengthen their emissions goals. The chapter then describes additional potential applications for the public benefit model, including carbon tax policies and the new Clean Power Plan regulations promulgated by the U.S. EPA in 2015. As uses of the public benefit frame expand, the chapter notes, a key question for the future will be what types of policy designs will be perceived as “fitting” with the norms that constitute the frame. Finally, the chapter discusses how normative framing could improve the ability to understand and predict other sudden policy changes beyond the topic of climate change.

Theorizing Norm-Driven Policy Change

Policy scholars acknowledge that norms affect policy choice, but have not fully articulated a theory of how norms can serve as a catalyst for sudden policy change. After reviewing existing efforts to theorize non-incremental policy change, the chapter offers an initial account of a theory of norm-driven policy change that could better predict policy change as well as stability in the future. The crux of the theory is based on the new idea of normative reframing, or using a new issue frame to portray an issue in terms of an alternative norm that supports a new policy alternative. This idea of new normative frames draws on and expands ideas from Baumgartner and Jones’ Punctuated Equilibrium Theory in trying to improve our ability to explain and predict sudden policy change. The chapter concludes with a conceptual overview of how the process of normative reframing helps explain the sudden change toward auctions in emissions trading policies related to climate change, and allows for better predictions of other specific policy changes in general.