The Challenges of Climate Change Policy: Explaining the Failure of Cap and Trade in the United States With a Multiple-Streams Framework

By Dustin R. Turin
2012, Vol. 4 No. 06 | pg. 1/3 |


With their long-term orientation, environmental problems present a unique challenge to the system of policymaking in the United States. The question of how to address climate change—and in particular, how to mitigate the phenomenon—has been particularly acute in its ability to divide policymakers. Cap and trade, a policy tool designed to place a total ‘cap’ on carbon emissions and facilitate the ‘trade’ of pollution allowances, nevertheless emerged on the debate with a strong track record and the promise of aligning the disparate goals of environmental protection and economic efficiency. Indeed, this solution narrowly missed becoming law in 2010. But, miss it did. Utilizing a multiple-streams framework focused on problem definition, policy alternatives, and political changes, this paper provides insight into exactly why cap and trade failed. It concludes that for a brief period, a window of opportunity existed to pass cap and trade, but that ultimately this window passed as cap and trade was displaced from the national agenda by healthcare, Americans increasingly questioned the science of global warming, and the Democrats lost their mandate in the 112th Congress.

Environmental problems occupy a unique sphere in public policy-making. With a decidedly long-term orientation, risks and benefits that are difficult to measure, and high-costs associated with their solutions, environmental issues breed stark disagreement among American policymakers. , the preeminent environmental problem of the past decade, highlights each of these challenges in the extreme.

In the United States, the primary target for climate change policy is the reduction of greenhouse gas emissions (GHG), particularly carbon dioxide, considered to be the “most significant gaseous contributor to global warming” (Blatt, 2011: 264). Most recent proposals to achieve this goal included some variation of a mechanism known as “cap and trade.” Various forms of cap and trade have been used over past decades to address a variety of common-pool resource, environmental, and issues, as a tool to maintain sustainable fisheries, reduce levels of lead in gasoline, and cut emissions of poisonous sulfur dioxide. Indeed, this market-oriented approach was historically bipartisan, supported by environmentalists and economists alike, and largely successful (Wagner, 2011: 104-8).

So the idea of utilizing the mechanism of cap and trade to reduce GHG emissions is neither new nor novel. By setting an overall cap on carbon emissions, allocating pollution credits, and allowing market principles to establish a price for pollution, cap and trade aligns the environmental goal of reducing GHGs with economic incentives to minimize pollution. Similar carbon markets currently operate in the via the EU Emissions Trading Scheme, through burgeoning programs in Australia and New Zealand, and in state and regional partnerships in the United States that include the Regional Greenhouse Gas Initiative in the Northeast and an emerging cap and trade system in California (Schiffman & Robbins, 2011: 104; Wagner, 105).

Notwithstanding the host of successful implementations elsewhere—and the historical popularity of cap and trade as a policy tool—a national emissions trading program in the U.S. proves elusive. Although at least a half-dozen Congressional proposals emerged since 2005, including the 2009 passage of the Waxman-Markey “American Clean Energy and Security Act” by the House of Representatives, cap and trade died in the Senate in 2010. Since that time, the debate over the roots of climate change grew louder, and a changing problem definition, an array of problematic policy decisions, and unfolding political events converged to dislodge cap and trade from the national agenda.

This paper analyzes the recent failure to enact cap and trade. To do so it utilizes conceptual tools derived from literatures on problem definition and agenda setting.

Problem Definition, Agenda Setting, and Multiple Streams: A Framework

The complex nature of environmental issues and policies create high levels of uncertainty and ambiguity that challenge the assumptions of rational decision-making (Kraft 2007, p. 14). Where the rational decision-maker is assumed to define clear goals, identify alternatives, evaluate the costs and benefits of each alternative, and lastly choose the most cost-effective strategy, in the real world—particularly in the pressure-cooker of U.S. environmental politics—this process is typically less informed by objective facts and rational alternatives, and is more often undertaken as a process in which those with a stake in the outcome make persuasive appeals. Stone suggested broadly that each step in the decision-making process is used as a “strategy to control a decision” instead of a process to reach an optimum outcome (2002, p. 243). In the battle over U.S. cap and trade, this indeed appeared to be the case.

Stone emphasized the ability to identify and control the range of policy alternatives seriously considered as a key component of political , much as Schattschneider classically stated, “the definition of alternatives is the supreme instrument of power” (1960, p. 66). The definition of a problem in a way that precludes undesirable alternatives is thus the most effective method of preventing certain outcomes—“even better than defeating it” (Stone, p. 246). Actors that can prevent the consideration of undesirable alternatives exercise significant influence over ultimate outcomes. As Schattschneider says, “some issues are organized into politics, while others are organized out” (p. 69).

To explain why certain policies are ultimately adopted, or as in the case of cap and trade legislation, why they fail, Kingdon (1995) developed a multiple-streams framework based on the earlier work of Cohen, March, and Olsen’s ‘garbage can’ model (1972). In the 'garbage can' model, the scholars observed that organizations display unclear, ambiguous, and conflicting goals; they often proceed by “trial and error” and “learning from experience,” without identifying or even comparing a range of possible alternatives; and lastly, the decision-making process is typified by the “fluid participation” of many actors, formal and informal (Cohen, March, & Olsen; Kingdon, p. 84). Kingdon further develops the garbage can model to analyze how actors interact, across and between stages, to formulate certain conditions as problems requiring action and to generate preferable alternatives.

Kingdon’s framework identifies two sets of factors—participants and processes—that affect agenda setting and alternative specification. Participant factors consider the position of actors inside or outside of government, their level of visibility, and their influence, while process factors form the trademark streams—problems, policies, and politics. Drawing on this set of participant and process factors, Kingdon theorizes that major change is more likely when policy entrepreneurs—influential actors willing to expend resources—successfully wed policies with problems, political changes, or—ideally—unite all three streams. These short periods of convergence between the streams create policy windows, or ‘windows of opportunity’ (p. 165). A policy window exists when some consensus has been reached that government should address a certain problem, a suitable alternative is available and matched with the problem, and the political climate is conducive to change. In other words, Kingdon sees these conditions as the “fertile soil” prerequisite for major policy change (p. 76).

Participants are independent of processes and classified by Kingdon according to two primary criteria: participants inside and outside of government, and visible versus hidden actors. Kingdon draws a distinction between visible participants—“Those participants who receive a lot of press and public attention” (p. 68)—and hidden participants that mostly operate out of the spotlight. Visible participants generally have a stronger affect on setting the agenda and tend to have less control over the specification of alternatives, while hidden participants (e.g., interest groups, researchers, civil servants) tend to be influential in specifying alternatives. In line with this view, Kingdon finds that the two most important groups of actors affecting agenda setting are also highly visible: the administration (consisting of the president and his appointees) and Congress.

Participants interact in the context of Kingdon’s three process streams of problems, policies, and politics. The problems stream is concerned with how and why certain problems gain the attention of those in government. Whether we define a certain set of conditions as a problem requiring government action is critical to the problems stream, and as Stone reiterates, participants compete to define problems according to their goals and values. Systematic indicators, “focusing events” such as disasters or other crises, and feedback contribute to shaping our view of problems and bringing problems to the attention of government. In the policies stream, Kingdon describes a process of alternative specification and proposal “[resembling] a process of biological natural selection” (p. 116) in which proposals must meet certain “criteria for survival” (p. 131). These criteria—technical feasibility, value acceptability, and anticipation of future constraints—determine whether an alternative diffuses within a policy community. The result is what Kingdon calls a “short list” of ideas around which a general consensus is established. Finally, the political stream accounts for a number of factors that interact to create an environment either conducive or hostile to certain types of ideas: turnover of elected officials, changes in administration, interest group pressure, and perceptions of the public mood are important among these factors. Within this stream, we find once again that the more visible participants—particularly the combination of public mood and election results, as identified by Kingdon—are capable of having “extremely powerful impacts on policy agendas” (p. 164), while the “organized forces” of interest groups and parties maintain important influence on the alternatives considered.

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