 Great to see you all here. This is a serious packed house, which I think is appropriate, given the amazing speakers we have and the importance of the topic at hand. I'm Michael Barr. I'm the Dean of the Gerald R. Ford School of Public Policy. I'm thrilled to be here today. It's a real honor and pleasure for me to introduce today's event. We're gathered to celebrate and also to learn from the latest book authored by our Ford School colleague and friend, Professor Barry Raib. Barry is the J. Ira and Nikki Harris Family Professor of Public Policy and Director of the Center for Local, State, and Urban Policy or CLOSUP here at the Ford School. And CLOSUP is, of course, a key sponsor of today's event. He is also the Arthur Thurnau Professor of Environmental Policy and holds courtesy appointments in the program in the environment, the Department of Political Science, and the School for Environment and Sustainability. Barry was recently a public policy scholar at the Woodrow Wilson International Center for Scholars and continues to serve as a non-resident senior fellow at the Brookings Institute. He has received four awards for his research from the American Political Science Association, including the 2017 Martha Durthick Award for longstanding impact in the field of federalism and intergovernmental relations. Barry co-chaired the Assumable Waters Committee of the U.S. Environmental Protection Agency from 2015 to 2017 and has served on recent National Academy of Public Administration panels, examining the Department of Commerce and Interior, as well as the Oklahoma Corporation Commission. Barry's latest book is Can We Price Carbon? Published earlier this year by MIT Press, the book is an analysis of the feasibility and sustainability of carbon pricing, drawing from North American, European, and Asian case studies. It's hard to imagine a more important question to answer. Barry explores in the book whether various carbon pricing approaches have proven politically viable and if adopted, whether they could survive political shifts and managerial challenges over time. Reviewers have called the book, quote, a triumph and noted that, quote, the work has profound implications for environmental policy around the world. Barry is held in high regard by his Ford School colleagues. He's a true leader whose service and teaching are just as outstanding as his scholarly work. Barry, on behalf of the faculty, congratulations on the publication of your latest book and on the impact it is already having and will continue to have on public policy. To host today's conversation, we've invited John Malueski who worked closely with Barry during his time at the Wilson Center. John is currently the Director of Digital Programming Host and Managing Editor for Wilson Center Now. He has a long and distinguished background in journalism, particularly broadcast journalism, including as host of the political talk show on C-SPAN. John, thank you very much for being part of today's event as well as the wonderful training you're gonna be doing later today with our faculty. So we have a closeup postdoctoral fellow, Sarah Mills, who's gonna work with her two students to sift through your question cards in the audience. We have Claire Caliban, maybe just Claire. Claire will play the role of two students in this show. For those of you who are watching online, you can also send in your questions. Please tweet your questions using the hashtag policy talks. The local bookstore book bound will be set up in the Great Hall after the talk to make the book available for purchase and importantly for signing. With that, I will turn things over to Barry and John for a terrific conversation. Please join me in thanking them again. Good morning, everyone. How are you? I see lots of remnants of sandwiches. What I don't see is enough books, so I think you forgot to pick those up while you were out in the lobby as well. Let me begin by a couple of quick things. Some business. One is I had the pleasure, as Michael just said, of working with Barry when he was at the Woodrow Wilson International Center for Scholars. And it's a terrific place to work. It's similar to what you experience here. Our old boss, Lee Hamilton, once described it as to incoming group of scholars and fellows as, it's a university without students or faculty meetings. So you're gonna love it. And what he meant by that is the kind of event that you're taking part in today. A real opportunity to speak to someone who's a thought leader in a field and explore his thinking on a really relevant issue. And it is, if you're interested in such things, as clearly your presence here indicates you are, it's really a kid in a candy store type of opportunity. It's not, the rest of your life, when you're out there in the work world, these kinds of activities won't be on your schedule as frequently as they are now. So I hope you'll enjoy it while you're in a community like the one that you're in today. And Barry, it was a complete pleasure to work with. Not just the professional level, you're lucky to have such a brilliant mind among you, but also on a personal level. As those of you who know Barry know, really a great guy. And we're here to talk about his book, Can We Price Carbon? And before, since I gave some opening remarks, I know that it takes an author to write a book, but it takes a village to support him and to support an event like this. And I know you wanna thank some folks as well before we get started. I do, and thank you, John. First of all, I wanna thank Michael for the very kind introduction. I wanna thank members of the Ford School and close up staffs who have worked at great lengths to bring this event together. Takes a lot of work to put on an event and they always do these things well. I'm deeply, deeply grateful to them. I also wanna thank you, John, for being here. It's a wonderful opportunity for it to continue our association. I also wanna thank all of you for coming, particularly those of you who are gonna be standing at this point. Hopefully it's offset to some extent by the conversation as well as the availability of food and drink. I also know we're webcasting and I just simply wanna say that I've been really touched by the number of former students, including co-authors who have reached out to me in the last 24 hours or so, and I'm looking into the camera right now, not knowing who I'm looking at, but I'm just heartened to know that indeed there were many, many folks, including many former students, and also delighted to be joined today by current students. Great, thanks, Barry. You know, in addition to my work in television, I teach for Penn State. Sorry to mention that, but I'm gonna play a Washington politician and try to relate to this audience. My father-in-law is a graduate of University of Michigan and my brother-in-law is a former captain of your tennis team, so please don't hold Penn State against me. Let me, a question for you before I ask questions of Barry. How many of you have ever written a book? I know in a university setting that's a higher percentage than in a normal setting, but even here, how many of you aspire to write a book someday? Me too. In my 30 plus years as a broadcast journalist, I've had the pleasure of interviewing dozens and dozens and dozens of authors, and I've become fascinated with the process behind the writing of the book, the story behind the story. And to be honest with you, I've always been searching for shortcuts that don't exist. The bottom line is people have to sit down and write. So Barry, before we get into the subject matter, I'd like to ask you about your process and how long it took you to write the book and what inspired you to choose this topic. I was telling Barry last night that I just interviewed an author last week who wrote a book on China from Mao to Xi, and it took him 15 years to write the book. Now, some people write a book in three months, but it's a whole different story. I know exactly when I decided to begin this book, and it was late in the evening on June 26th, 2009, and no, I don't keep closed calendars. I'll be a full investigation. And prior to that point, mid-2009, I had finished a book looking at the politics of climate change where I was trying to ask why an issue that we talk about as global warming or global climate change was proving so difficult to deal with at the international or national level, and yet in the US, for example, a great many state and local governments were engaging the issue and playing some kind of a role. And from that, I moved on in 2008 and nine, a year that I spent at the University of Virginia Miller Center, putting on a conference basically at the point of transition from the 2008 election and the inauguration of President Obama in early 2009. With the report of bringing together of teams across disciplines and asking what is the future of climate policy in the US and internationally. And it was a very hardy, robust period where the anticipation was certainly in the US, but not just in the US. That we were marching toward the adoption of aggressive strategies through federal public policy in the US and internationally to try to reduce the threat of climate change by reducing greenhouse gas emissions. It was a moment after the election of a new Democratic president but who had defeated an opponent, Senator McCain, both of whom in the Senate had supported essentially the same legislation, carbon pricing, cap and trade legislation. Democratic numbers were overwhelming in the House and Senate, and at that point, there was still a bipartisan sense of possibility on the issue. And so I got to June 26th and watched on C-SPAN, by the way, a network dear to your heart and mine as well. And watched the seven and a half hour floor debate in the House of Representatives to vote on the only piece of carbon pricing legislation ever to pass a legislative chamber in the United States Congress, which passed the Waxman-Markey legislation. But as I watched, I realized I had been charting these state trends and looking at some of these issues, and yet there was this underlying presumption that this was inevitable, in part because the idea of a carbon price was so compelling as presented by the discipline of economics. Whether a carbon tax or a cap and trade system or some hybrid, the presumption was a great policy idea embraced by a diverse set of economists across the ideological spectrum, not just in the U.S., seemed to be an inevitability. I had my doubts about that and the ability of Congress at that time to adopt legislation. But I watched the legislation and the debate seven and a half hours. I watched legislator after legislator extract some favor from the majority leadership in the Democratic Party before granting their vote. And finally, the bill passed but only by seven votes and needed a crossover of Republicans to put over that near majority. But clearly, this was legislation in trouble, not only because the Senate stood before, but there was clearly not a broader buy-in support of this idea of putting a price on carbon emissions and then allowing markets to try to respond. And so with that, I actually began a project that was rather quiet, almost a stealthy kind of project where I looked closely at each and every state, each and every Canadian province, but also tried to develop a database looking around other countries around the world, including from Latin America, including from Europe, including from Asia, and then tracking this over a period of time. And so in a sense, what I try to do is look at a period of about the moment that the Kyoto Protocol was negotiated in 1997 with this blip in 2009 where it looked like the US was gonna make real climate history, but did not, and then continue it on until the completion of the book. So at one level, a pretty long project. Yeah, serious matters take time. It's still a work in progress. Right. I wanna ask you about some definitions before we dig deeper into some of the specific examples. You mentioned cap and trade, and I'm guessing that's a term that most people have heard of, maybe the most prominent version of this. But carbon pricing is more of a bigger umbrella term, and cap and trade is just one iteration. Is that correct? That's right. I really focus principally on two policy tools. One, a so-called carbon tax or an equivalent where you're trying to look at the emissions or the carbon damage related to different fossil fuels, natural gas, oil, coal, and then price those accordingly through some kind of a tax usually close to the point of consumption. The cap and trade issue may be more familiar. It puts an overall cap or restriction, hence the cap and cap and trade on the amount of emissions that would be allowed over a period of time, but then does indeed allow for and trade on emissions trading mechanism. What's probably most familiar here is the US experience through the 1990 Clean Air Act amendments, but there are also other examples of this of putting a cap on SO2 emissions from the utility sector and then gradually bringing that down and allowing markets to work. In the case of the SO2 experience, that is seen as a model and there are also examples of models as well. What would be if cap and trade is the model that has gotten the most airtime to a general audience, what would be another model that is most prominent? On the carbon tax front, I think the experience would be from the early Nordic cases, five countries in the early 1990s, but I also decided in the book to actually delay the book a bit, this is an amendment to your first question, to really look at other kinds of ways a price might be adopted. Now gasoline taxes, gasoline excise taxes are familiar to all of us, they have significant limitations, but to some extent they do the same thing. And I also have spent a lot of time looking not at the point of taxing consumption, but where you impose a tax at the point of extraction, literally where the minerals, in this case, coal, oil and natural gas are being removed from the surface of the earth. Extraction taxes. Extraction taxes, some might call those mining taxes. Exactly. And looking then at the issues that are in play there, again, domestically but internationally. You mentioned gasoline tax. And I don't know if I told you this story before, but Tom Friedman, the New York Times columnist was speaking at the Wilson Center, and he routinely was using the phrase, Washington is broken. And finally, when we got to the Q&A session, people like you, someone raised the question, what do you mean by that? Everyone says that, what do you mean by that? And he was stumped for a second because he admitted to being an autopilot, but then when he recovered he said, well, let me give you an example. Every energy expert, every economist in the globe says that a gasoline tax makes sense, and yet it can't even be brought up as a political discussion in Washington because it's radioactive. Two members of Congress of both sides of the aisle. And so I wanna ask you about the barriers and about the political viability of carbon pricing in any iteration. How difficult the lift is it? Certainly in the United States, any tax is difficult at any time to create or increase. The gasoline tax is an interesting one to ponder and think about even historically because without looking at the climate legacy of the interstate highway system, it's no secret if you look back to the 1950s, there was a broad coalition of support post World War II to create something like the interstate highway system. The continual problem and log jam was how do you provide that benefit by imposing some kind of cost? And part of the genius of the Eisenhower strategy during his presidency was actually to go back to an earlier state excise tax that had been phased out at the federal level and impose that tax. But the politics were really, really difficult and challenging and tricking on that front even before we get to subsequent iterations of the tax. So that in a small way is a way to think about the challenge of imposing carbon price. When in effect what we're asking here is to take a commodity that is perfectly legal to use everywhere in the United States. Is produced into some manner of fashion in at least 30 states. Has a base of senators and state representatives in the house that represents some amount of energy production with relevant jobs and tax base issues that is quite vast and substantial. For which there has never been a serious effort to say that is an illegal product or should be shut down entirely. To then begin to say the consumers of that product we want you to begin to pay more. How many prices and how many commodities in the US is it easier to find out the price of than a gallon of gasoline? I can go several blocks from my home in multiple directions and find out whether I want to know or not what that price is. But similarly we tend to be very sensitive to a range of pricing strategies. And so what carbon pricing in effect is doing is saying let us take this commodity that is familiar is a very good source of energy at one level even though the negative externalities the environmental consequences are severe and add to the price that you are going to see every time you pay that bill or use the commodity. With then the hope and expectation that in some way that contributes to an environment or a societal benefit that may not be experienced in the near term and may be hard to measure. So the US has reduced its greenhouse gas footprint in the last 10, 15 years. It's not clear that most Americans are aware of that. It's not clear what the climate benefit of that actually is in measurable terms. Some call this a super wicked problem. Is it clear that there is a benefit it's just not the exact magnitude of the benefit? We're entering into really uncertain terrain here because of the great accumulation of greenhouse gases which have defied policy strategies for so long. There's ample reason to think reducing continued release pays some kind of a benefit but to compare that to the very specific cost of adding 50 cents to a gallon of gas is a really tough trade off. What is the current price of a gallon of gasoline in an arbor? I'm the one guy in America who doesn't look at the gas because I have to buy it no matter what it's priced at so I just insert credit card and withdraw quickly and all that. What is it, a little under $3 right now? Yes, 280. 280, would you pay 380 for these benefits? How many of you would pay an extra dollar for a gallon of gasoline for the types of... See in the abstract a vast majority of people are willing to pay it. But when push comes to shove and you have an example locally here on campus of an attempt to reduce carbon footprint through a variety of measures, can you share with us how that experience played out? Sure, absolutely. And first of all, if this is a representative sample in this room, Sarah Mills is laughing, we've never seen survey data remotely looking like this. They answered public transportation. Yes, so I think the case you're referring to is the question of how do our great universities, including this one, deal with the issue of greenhouse gas reduction and climate change. At one level, the university has been a great leader for some time, having developed action plans and strategies to try to reduce its carbon footprint for a number of decades, laudable. And for a campus as big as we are in a region that has as little well-established mass transit and the like, it's really quite laudable. Right before the John, I left for Ann Arbor to spend a year with you and your colleagues. I was invited to join President Schlissel's latest review panel and commission on this. And it was a great, great committee. Some of my committee members are here today. And it was fascinating because we actually were able to look under the hood at the University of Michigan, which is not a world superpower in terms of greenhouse gas emissions, but it's not trivial. When you look at the campus, when you think about the hospital, when you think about other parts of the system, other properties, it's not a trivial player. And so given the deep, deep concern on this campus, one would think that the university would be a leader and in some respects, we have been that. But then think about how a great community like ours might reduce that footprint further. Well, we looked at options. We could divest stock in fossil fuel companies. We could put lead platinum, standards in all building construction. We could add other energy efficiency provisions. We could ban driving on central campus. Other kinds of measures. We could buy or trade off solar purchases or wind purchases on or off campus. All of which might help bend the curve. But all of which is if the economics is right, and I say this as a political scientist, not as an economist, we know is gonna be much more expensive per unit of emission reduced than using a pricing mechanism. So we got to the point in our deliberations where a former, actually former student of mine, he's from the College of Engineering, said wait a second, why don't we, this is a large gathering of faculty, staff, students. Why don't we put a price on emissions? Why don't we do carbon tax? He actually looked at me and winked because we had talked about it in class. This was not a setup by a faculty member. And it was very interesting. Doug Kelbaugh who's here today began to talk about from a Dean's perspective, existing pricing and energy bills that colleges like yours and ours receive on a regular basis. We talked about technical feasibility, but then concerns began to emerge. And they came from some faculty colleagues in the natural and physical sciences. Would a tax or a price on carbon at the University of Michigan be a net benefit for the faculty and the humanities and social sciences because their offices are relatively small, but an unfair burden on those in the natural and physical sciences because their office space and laboratories are larger? Would this impose a constraint on university faculty and students who would want to travel and have to some extent use fossil fuels to complete that travel? Would this impose an undue burden on places like the medical school or the athletic program where there had been really substantial growth and outreach? And other kinds of concerns and issues that were emerged. Now I left campus before that project completed. There's a paragraph in the last advisory group report about the desirability of considering this and studying it further. But I've been back a few years and it hasn't happened yet, but it does raise some really interesting questions. I don't hear much debate that really challenges the fundamental tenets of climate science on this campus unlike most other areas. And yet it's quite ironic when you look to a policy tool like carbon pricing how rare we have seen, certainly in the U.S., that public or private universities take this role and I see this as a challenge. Now John, you're from Penn State but you have some Wolverine blood, right? We talk about ourselves as leaders and best. We've even done Tower Time, which is truly inside politics for Michigan. We've been able to implement that. I think it's interesting to think about what a really innovative, aggressive strategy would be and a great place to test a carbon price to me would be on the campus of a great public researcher. What you describe as such the classic model of why it's so difficult to make long-term change. When you start connecting the dots as you did here all this complexity is revealed, all these unintended consequences are revealed and so it's the old thing. Everybody wants to vote out the bums in Congress but they wanna keep their own member. It's somebody else's district they wanna vote in. So it's that type of activity among the populace, civic actors and then adding to that we're just not wired for long-term planning as human beings. Everything is lunch. That's about as far ahead as we're thinking, right? So there's so much. Have you seen anything in your research that is able to crack this code? The long-term planning pieces of this are really challenging. Certainly there's this initial challenge of whether or not you can gain political support to push through a legislature or whatever the democratic body is on agreement to start the policy. But then there's also this longer term issue is the policy well-designed? Is it managed effectively? All of these types of issues. And it is one of the great lifts and challenges in American politics to do that. I raised a question with my class at the beginning of the term. You know how many times in your lives have you been asked by a political leader to make an express sacrifice for the broader good? With the idea that the benefits would be long-term. And there was not much in the way of illustration and example. I'm hard pressed to answer that question. Internationally, students from outside the US wrestle with that question as well. So it's a climate issue, but it's also a broader public policy issue and question as well. Now, there are illustrations and examples of this and how this can be well done. One of the challenges in pulling this together is the end of cases that I have to work with. The case is between 1997 and basically the end of 2015 where you have been able to create a coalition to support the carbon price through political means. And then actually launch and adopt the policy and put it in place, including all the good management provisions, transparency issues and all the rest. Maintain that policy through an inevitable change of government. When the president, the premier, the governor who advocated it is no longer in power and there's a partisanship, especially once the costs have been imposed. At every stage of that process, I found an ever shrinking number of cases, not just in the US or North America, but internationally, and yet there are a few. I think the experience of the Nordic cases are intriguing, particularly Norway, because it is a major producer of oil and gas. That not long after the big North Sea strike and expansion of offshore oil production, not only they put extraordinary constraints and restrictions on methane flaring and emissions far beyond I think what we see anywhere in the United States, but they also applied their own carbon dioxide tax initially created in 1991, expressly to all areas of oil and gas production. I think the case in Canada and British Columbia, a economy wide carbon tax adopted by a right of center government in 2007, which has sustained multiple re-elections, shifts of leadership is a really intriguing model. Even in the American Northeast, the nine now 11 states that form the regional greenhouse gas initiative, initially adopted by both Republican and Democratic legislators and sustained over time for now about a decade, is an interesting model if one wants to design a cap and trade system to begin to see how that works. There are other illustrations and examples as well that come into play. So there is a very small end, and I think it puts us in an interesting position because it's not just theory, it's not just putting up an equation and saying, here's how the world would work if we can hold politics off to the corner, but there are some real world experiences to look at, and then also the kinds of cases you were asking about earlier. I have advocates of this type of activity done enough to promote the benefits. I mean, in most cases you've got to seed the environment where you're going to execute public policy changes that are going to change the way we live daily. I think, I don't want to suggest that the secret sauce wink wink is think about the benefits and sell it to constituents, but it is not a trivial factor or issue and it has largely been missing in the discussion. I readily admit that my discipline, political science, was largely missing in action on this issue for a long time, and there was just such, such confidence that the idea again itself would be so compelling, it would bring people together, and yet people inevitably want to ask if you are asking me for a sacrifice through increased commodity prices for energy. Not only what is that going to do, fair point, but how is that revenue going to be used? There are a few things that do begin to emerge, again, drawing from a very small line of cases, if one wants to increase the likelihood that a revenue strategy builds support rather than loses it. We find that any effort to put funds into general budgets is a support loser. Any effort amongst Republicans and Democrats to put the money into deficit reduction is a true non-starter. It drives down, which is so bringing a number of ways, drives down support for any kind of a price or a tax across the board. The two areas that really do seem to trigger interest, both in express empirical cases around the world, but survey data that we've seen is one, some way to return the money to the citizenry, either through dollar-for-dollar tax reductions, what's known in British Columbia, but other places is revenue neutrality. There are bills along these lines before Congress or some kind of a dividend or a dividend check. We can go much more into that. Tuition rates, something like that. There's actually an interesting parallel there, yes. Penn State discussed that, by the way, on the question of drilling in public lands. We'll talk about that later. The other one being transition toward energy transition, paying for some of the costs of transition to wind, solar, other renewables, or energy efficiency. If you look at the more resilient or what I call in the book the durable carbon pricing policy strategies that we've seen, they worked hard at the get-go to come to some kind of a conclusion or consensus on what the revenue use strategy would be. They were transparent about it. They really didn't make any bones about the fact that this was gonna be a price or a tax or prices are gonna go up, but alongside the cost increase, which they acknowledged, they were very clear, not only saying we're gonna provide this benefit, but then measuring that and making that readily available, however that would be provided. So I think this is not again the only component of this, but that is one really significant part that's been missing in a lot of the discussion. The story of tobacco in the United States provides a good comparison. It meets a lot of the tests of it was a legal product. A lot of people used it, all of these things that you talk about. And yet, a similar to carbon pricing mechanism was instituted to try to reduce smoking. And then those benefits were shared with the general public and through public health programs and other things. Is there something to be learned there? And I know you have a personal story to tell here if you'd like to tell it. Okay, yes and yes. So tobacco becomes the interesting case. And I genuinely wish my dear friend and colleague, Ken Warner, a defining figure in the field of public health, the former dean, but also the true dean of research on the political economy of tobacco. I was a colleague early in my career and we would talk long in many days about challenges he was facing in dealing with a commodity that was legal, had a wide base of political support in a great many states and legislative districts, had all kinds of government programs and the like to support it. And yet the evidence of the risks were severe. And how we have gone from a society to when I arrived at this campus, more than 40% of Americans smoked tobacco on a regular basis and we're now in the low teens. It is by some measures, one of the great public health stories of certainly my lifetime. I would argue another is the interpretation of the implementation of the Clean Air Act over that period. So tobacco becomes an interesting case to think about. It also hits home because my dad worked in the field. I was enlisted at a very early age to write letters to legislators who had the audacity to wanna influence my dad's livelihood, which was selling tobacco products. And when there would be proposals in Illinois to increase the excise tax on tobacco or in Congress, usually these were pretty small. I got enlisted. I guess you could say it was my first professional writing. I think he's slipping a buck a letter or something along those lines. But interesting to think about that because tobacco taxes at the federal level are 321% higher than when I set foot on this campus for the first time. During that time period there had been 126 separate state decisions to increase cigarette taxes. That is not the only factor driving that huge shift and change. There have been regulatory procedures and the like and I readily admit that. But by almost all the empirical accounts that I've seen of tobacco policy, the biggest single driver is the price. And yet, at the early stages of that policy adoption, the thinking was you would have to go at this through some kind of other mechanism, control advertising, restrict access to the process, labeling, other kinds of things, all of which can play a role and did indeed play a role. But you could not go to the price because at that point 40 plus percent of Americans are using the product, they see the price, you can't go there. That politics flipped and shifted in a number of ways. Now the point here is not that the epidemiology of tobacco is identical to tobacco, tobacco to climate in terms of health risks and the like. But it is interesting to think of how at certain moments we have taken the tool of taxation. Difficult though that is. Especially on commodity products. And in fact, ask people to make significant sacrifices, possibly encouraging them to use a product that harms them and harms others. And create a pretty fundamental public health reform. Are the barriers here all in the political realm or are any of them in the technical realm or scientific realm? They're heavy enough in the political realm. Don't need any more. It would be so much easier if we were at the point where we were with the sulfur dioxide experiment of the 1990s. And to me, this is one lesson and limitation of trying to apply lessons from that model applied to sulfur dioxide to carbon. Yes, the cap worked. Yes, the emissions went way down. Yes, the costs were far less than we thought. But the secret sauce there was two things. One is there was readily available technology where if electric utilities wanted to continue to burn coal with high sulfur content, they could purchase scrubbers and other emission abatement technology and achieve the job. And there were actually tax credits and incentives to allow them to do it. I'm not aware of any carbon emission reduction technology that works in the same way for coal and scrubbing out carbon. At the same time, the politics are really interesting and I think have often been ignored by efforts to really hold up the SO2 cases, this extraordinary success story, worthy in many respects. And that is the fact there is coal with much lower sulfur content. And guess what? It's not located in Pennsylvania and West Virginia, but it's located in states like Wyoming, Montana, other jurisdictions. And so if you look at the politics of what it ultimately made the 1990 Clean Air Act of Amendments and that provision of the Clean Air Act worked, it wasn't just the kind of coming together, larger sacrifice, coalescence around an idea, all that was a big part of it. But because you had technologies that could be brought in off the shelf and that people would benefit from its use. And you suddenly had legislative districts, Dick Cheney, then Wyoming's only member of the House of Representatives, not usually seen as a big fan of putting prices on the emission of use of fossil fuels. Flipped and shifted because this was the best thing imaginable for Wyoming politics and coal production because it meant Wyoming coal was a lot more attractive than that being produced in West Virginia. So technology is big and significant. I would argue here on the carbon area, one of the great things we've seen in the last 10 years is the transformation of technology, not necessarily emission abatement technology, but renewables and the way they have begun to move forward and really take hold in a great number of states, including a great many places that have never come close to adopting a carbon price. Places like Texas and Oklahoma, for example. Are there shining examples of experiments with this type of activity that have yielded dramatic results? I know there was the so-called Alberta experiment. California clearly has not dropped this in light of even federal policy. Governor Brown ready to go it alone. Michael Bloomberg has been a huge voice for that type of private sector initiative independent of government action. Are there examples in this country or anywhere else that all the things that we think could happen in the best case scenario have happened? Yes. Think about wind and go back to where we were in 2009, 2005, 2000. Not that long ago, former president Bush stood before the American Wind Energy Association and got a standing ovation. It was because of pioneering legislation he had signed as governor of Texas in 1999 to kind of open the way to development of that technology and the whole development of wind in Texas. I was at a meeting independent of this sitting next to the Speaker of the House of the Oklahoma legislature a few months ago. He pointed out to me that there was one day earlier this year where Oklahoma, big oil and gas country, home of Cushing, Oklahoma, the pipeline capital of the world, at least the continent, said you know, one day this year we got 61% of our electricity from wind, just that one technology. Transmission, other areas, this is not my area of expertise, there are a number of folks in the room who are far better qualified to answer this question than I am. Huge shifts and changes in that regard. That said, another unexpected consequence from that earlier period is it's proven a lot easier to continue our reliance on fossil fuels than we had thought. Wasn't that long ago that we were talking about oil and gas as having reached their peak in terms of production? Daniel Amy's here who's looked in his work on the fracking debate at some of these very questions and issues. And so what happens when fossil fuels become suddenly more available, more abundant at lower price than we would have thought of and so that natural pricing mechanism on the other side of the supply side energy level ledger has also emerged alongside this and I think with it comes a really, really interesting question about not oil and not coal, but natural gas. And is that truly a bridging fuel? Can we really reduce related methane releases and emissions to such a low level at such a low level of confidence that you can actually make a credible case for natural gas or our production processes and even technology limitations so slip shot, so secondary compared to Norway in terms of international comparison that we really can't compete and it gives one pause. We are at the tail end of a hurricane season that has been epic in many ways and those of us living on the east coast have seen unprecedented flooding events and more rain than in my entire lifetime, you remember, is urgency building and I know you can't tie specific weather events to climate change directly, but in the public consciousness there is some sense of a connection here and it seems to be growing. Do you sense any sense of urgency here? And for a long time, the notion was that science might save us, but maybe there's a case to be made based on your research that it will be economists who will save us instead of scientists. You know, from my own vantage point of my office, the science are evident, the science is really quite compelling. It becomes only stronger over time. What that means a year, five, 20 years from now, we can debate. That is not held by all Americans. In most of our surveys, we continue to find when you ask Americans, is there solid evidence of warming global temperatures over the last four years? Forty years, excuse me. Notice I did not say human causation. You still find about three out of 10 Americans who say either no or they're not sure. So there's divide on this. It's deeper in the US than in a number of other places, but that clearly complicates certainly any political case to act when you have a built-in coalition that just does not see that as an issue or a problem. Now, there is often a kind of questioning or challenge that takes place in science in the US. Even tobacco, almost a half century after the big Surgeon General's report. There are about nine or 10% of Americans who argue consistently in response to Gallup polls that there is no solid evidence or convincing evidence that smoking cigarettes leads to proven health risks such as cancer. I'm not saying it's exactly the same, but there is that weakening of the debate and it is a challenging one. I do think for those who want to engage in serious action and construction action on climate, it's important to begin to think though about meaningful and credible ways to make the science relevant because it's going to matter differently or emerge differently in different subclimates or ecosystems. I find it intriguing to see that perhaps the first state to adopt a carbon tax may not be New York, may not be California, may not be Massachusetts, it may be Alaska. Part of that is because in that state, they are really seeing profound but somewhat unique to Alaska shifts and changes in the climate that are affecting core economies, are affecting public safety as roads begin to collapse in unique ways, but is relevant for that kind of conversation. And so again, we often talk about global climate change and we're looking at averages and we look at IPCC reports and we sort of list two degrees or 1.5 degrees and all relevant stuff. But climate change is going to mean different things to different people in almost every region, almost every state or congressional district, much less around the world. And finding ways to tailor that message in a way that's credible, that's not amped up, that's not hyped, but is real, is going to be significant. The Alaska example is completely important in that, you know, you talk to people from Alaska and the whole Republican, Democrat, liberal, conservative thing breaks down completely because they are Arctic communities in the front lines of this. There's a, recently you may know the story, there's an entire village in Alaska that is being moved because the permafrost it sits on is melting and it's no longer sustainable. We are at that awkward moment in these types of events where I'm about to turn it over to you for your questions and comments, but I still have a dozen of my own and I need to buy a transition so that the people here sorting through the cards, Sarah and Claire can do their work. So I'm going to ask one final question before we turn to your questions. And that is, what's changed since you wrote the book if you were going to write an additional chapter right now, what would that contain? A little gimmicky question I admit, but you know it sometimes yields an interesting answer. So one of the many challenges of finishing this and I don't think I've ever had this happen, John, anything I had written before, is when I completed the manuscript and that's about the time I was returning to Ann Arbor in 2016, middle of 2016. I went through the review process and academic processes of manuscript becoming a book. A lot of the world was changing. It always does, right? But a number of countries began to make initial steps toward a carbon price, including China, including Japan, South Korea, Mexico, Colombia, Canada and the new Trudeau government began to try to implement and adopt a nationwide carbon pricing strategy working with all of the provinces. And we had this election in the US with pivots and shifts in federal policy, particularly efforts in the Obama administration not to go through Congress, but to reinterpret provisions of the 1990 Clean Air Act to in effect establish a type of carbon price strategy through administrative action, all of which were susceptible to shifts in reverse. And so what I've tried to do is take some extra time to come to terms with all of that, the Obama to Trump transition, Canada developments and other places around the world. I don't think that that fundamentally shifts the thrust of the book, both the fact that for one of the very few times in my life I've chosen not to make some declarative statement in the title for a long time. The title of this book was The Politics of Carbon Pricing. I ultimately shifted toward the questioning because I want you to think about that and because I'm not sure, but I clearly have my doubts as to whether this is feasible and I'm not sure that anything has happened in the last year or so that fundamentally alters that, but I also think it's a huge set of challenges for me going forward, but also anyone in this room and beyond with interest in this question, not just raising concern about climate change, but how does one do that in politically and socially credible ways, economically responsible ways? How does one fashion a political coalition that can come together, but not just last for a short period of time and then be reversed? Because that doesn't know on any good. Okay, we're gonna turn to your questions now and we have hired legal counsel from Arizona to represent you and she will answer, ask Claire Caliban. Before I jump in, I'll just briefly introduce myself. My name is Claire. I'm a senior in program in the environment this year studying environmental policy. In addition to being a former student, I've also had the pleasure of working with Dr. Raebe over the past six months to study the political feasibility of a methane tax in order to reduce venting and flaring. Methanes begun to figure increasingly in federal and state carbon tax proposals over the last decade, which has generally been unheard of before this. So our first question is two different versions of a federal carbon price have been proposed. One by the organization Citizens Climate Lobby, the other by prominent Republicans, George Schultz and James Baker. It's clear we need a bipartisan plan for long-term success. What will it take to get bipartisan support in the U.S. Congress? Next question. Come back to you, John. Who's choosing this question? You know, thank you for the question, Claire. Whoever wrote it. It is a very interesting moment in a political system when there is virtually no immediate likelihood that a particular policy can be adopted to then work on the idea side and begin to think what the policy might look like down the road and then begin to think about the conditions or circumstances under which it might happen. And so the proposals that you articulate are really quite interesting. A few of the trends I think we're seeing in D.C. right now are a shift away from focusing as much on cap and trade as we were 10 years ago and focusing much more on the tax idea, but then with it expressing your question, are these revenue allocation strategies? And part of that becomes, when you think about imposing some cost, but then the allocation, is how are you trying to build your coalition? Clearly, the more you move toward a revenue return or a tax cut provision, the more theoretically you're moving right of center and looking for Republican votes or potential Republican votes. And just recently two Republican legislators in the house introduced legislation. It's not clear they're gonna survive their coming reelection bid, but they would actually focus on infrastructure and other kinds of considerations and issues. But then interesting to think about what a kind of a centrist kind of a coalition might look like as opposed to say some others that have more of a linkage to expenditures on environmental policy where much of the coalition seems to be center left and the like. My only thought here and commenting on these now is in my experience with legislation, anywhere in the world has been adopted and has sustained over time. There is some kind of multi-partisan buying if not initially the coalition expands rather than shrinks. And I think there's a significant danger certainly in a two-party system like ours that thinking that an issue like this can simply be the ownership of one party. And all that party has to do is win an election and run the table and control all the levels of government, legislative and executive branch, push legislation through because it just becomes a sitting duck and a target for that kind of shift. We're seeing that in Canada. So I'm happy to talk more about the particulars of those specific policies and proposals, but I think those are some general patterns of trends. Our next question comes from a student in Dr. Abe's course. Carbon pricing tends to disproportionately impact low-income people who spend a greater proportion of income on carbon-intensive goods and may have less ability to make substitutions towards low-carbon alternatives. How could or how should carbon tax policy address this potential injustice? Huge issue. And I do think a missing part of a lot of the earlier conversation on carbon pricing, not just in the US, has been not just how do you spread the money around to get enough people on board, but for that to be fair and equitable and to make sure that those amongst us who have the least, who might be harmed the most are treated fairly in what that might look like. There are revenue return mechanisms. I think part of the attraction for some of a dividend approach, which has some support from a broad range of groups such as the Citizens' Climate Lobby, but you also mentioned the Baker-Schultz proposal, is that that money comes back in the form of a dividend check. Everyone gets the same amount. In the Alaska case, not where there's a formal carbon price, but there's a 50-year experiment with using dividends related to the production of oil and gas, every Alaska citizen gets a check of a designated amount each year, which is actually thought to have helped create greater income inequality in a state where there's a boom and bust economy and a large number of challenges. But I think that has been a missing force in factor, and I've really welcomed in recent years seeing the environmental justice community formally engage in a number of very active conversations. I think we are beginning to see. I've actually been very heartened since the publication of the book to be invited in, kind of behind closed doors into congressional discussions. Groups that normally would not agree on anything coming together and privately discussing the terms under which at some point down the road they might begin to come together. And I think the very issues that are raised by this question are beginning to emerge. That's not an easy question. We're talking about splitting revenues. What is fair when you get a pool of a billion dollars or five billion dollars or 10 billion dollars and everybody is probably paying something different into that pot. But it's an important one, and just fundamentally crucial to get that right early on because otherwise you're constantly reinventing in the wheel, a footnote on that if I might. One of the reasons I did not mention California as an out and out success story is that politically the California story I think is intriguing, that you have had broad buy-in on the need to engage on climate actions amongst every Republican and Democratic governor going back not just to Arnold Schwarzenegger but others like George Dukmejian, Pete Wilson. There's been a broad political consensus on California for a long, long period of time. And as long ago as 2006, California passed a comprehensive climate bill that included cap and trade. One of the things that California has struggled with is that it took them actually five years to launch that cap and trade system. And now 12 years since the adoption one of the biggest points of contention in California where there's not much opposition, not a broad base of opposition to the policy is how do you divide that revenue and what is fair? California still hasn't resolved that and that's not easy anywhere politically but it's I think both an opportunity and a challenge. Another question from a student in your course is this term, economy such as Wyoming are dependent on coal revenue for education and infrastructure. How would you promote a carbon tax to representatives from states like these? So Wyoming has some parallels with Alaska, other production states like Oklahoma, Texas, North Dakota. I sense no groundswell in those states of support for what we have thus far have been calling a carbon tax or cap and trade. Those are generally the states that have been the most aggressive in taking action. For example, in responding to the Obama administration's clean power plan with attorneys general going into court. That said, I make the argument in the book that if a carbon tax puts some cost on fossil fuels in many cases the states that have been leaders in this area are not just the California's or Massachusetts or mains of this world but they are indeed places like Wyoming, West Virginia and the like. And these are through severance or extraction taxes. Taxes on the removal of minerals or natural resources. That can be copper, that can be helium which is used in medical devices, not just for balloons, it can be gold or other things but it's also oil, coal and natural gas. States like Wyoming have had to some extent an incentive to think about extraction taxes, whether or not they're concerned about climate change but because often they see adverse local impacts, environmental impacts, land use issues and the like from mining and from production. They also realize that they're producing a product that's gonna be put into global markets and most of the cost of purchasing and using those markets is going to be born somewhere else. Alaska and Wyoming use less than 1% of the oil and gas that they produce. So guess what? You can look at these extraction taxes, severance taxes, elsewhere in the world, these are known as royalties but they focus at the point of production and the political calculus changes somewhat. They are not easy to adopt politically. If one looks historically, and I've really been doing this much more with Rachel Hampton, Claire, you played a role in this other former students in recent years, they're largely understudied outside of economics and the history of states adopting these taxes have not been easy. They often take decades. There are brutal political battles. In Wyoming there was a Republican governor named Stanley Hathaway who risked much of his political career to kind of move this forward and I know you've looked at some of those early debates. To put those in place and sustain them in some cases means the highest actual carbon price that we apply anywhere in the US presently. I've been intrigued to see in a growing number of carbon price proposals, including some on Capitol Hill but also internationally, to think about what happens when you impose the price not at the tailpipe or not at the gas tank but at the point of consumption and then begin to think about the distribution or sharing of that kind of revenue. That should not be read as here's the easy answer or the easy fix but often when you go into this area and look inductively rather than just working with the existing common sets of issues, you find some surprises and there are and I think there are some possibilities here. I just might expand on that. I also think this becomes important because some of these states have found very creative and constructive ways to use the revenues from some of these taxes. One of my heroes is Arthur Link. Probably not remembered by anyone but in the 1970s was a Democratic Governor of North Dakota who at a point where North Dakota was aggressively pursuing coal, expanded coal production. Risk his entire political career by saying we're gonna go after this resource. We are gonna have a state of the art reclamation program and we're gonna link these funds to a coal protection and severance fund. There's some really interesting cases and examples and stories out there to think about and one of the reasons that this is so important to me is I do think many concerned about climate change have tended to be very dismissive of places like Wyoming and places like Oklahoma and places like Texas. We don't interact necessarily very much. Michael has asked me to lead this year an initiative in the Ford School, conversations across difference. We can define that in many ways but one point of challenge in this area is that people who tend to favor aggressive climate change strategies the most often don't talk to people from the other side of the equation or go into those states where there is a real dependence on producing fossil fuels for their way of life. How do we manage and bridge that transition? If we are really talking about making wrenching changes in our use in production of oil and gas. That won't have much effect on most of us in Ann Arbor unless we happen to be involved in the industry but in a lot of states, in a lot of congressional districts that will have wrenching changes and I'm persuaded by my conversations that one of the great fears in many parts of the country to climate policy or a carbon price is a sense that folks who wanna use the product but don't want anything about production anywhere near them will be the beneficiaries of a cleaner environment but we'll ask other constituencies to basically eat the costs and work out the transitions and hope things work out. There are huge opportunities here for a larger coalition building but also having that kind of conversation arguably across some of these sorts of differences and that's one of the reasons why I've spent a lot of time at least trying to think about and begin to enunciate some of these things and you mentioned methane. I think methane fits this pattern perfectly. Back to you counselor. Sorry. We have one question noting there's movement to limit the role of the federal government on environmental policy. Another question asks why focus on federal level when states are pushing forward or increasing state level renewable portfolio standards? Sure, sure, interesting question. I'm gonna take the second part of the question first. If you know my sort of earlier scholarship I made reference to it earlier, I deeply believe in models of federalism. I deeply believe that states and local governments can play creative, active and constructive roles in many if not most areas of environmental and energy policy. That's true in the US but it's true in federated systems around the world. That's, I would argue in the last 10 years but certainly in the last couple of years we have begun to deal with the limits of what individual states working unilaterally can do. There is enormous pressure at the state level to go far but only to go so far. And actually chronicle in the book efforts by a great many states to adopt climate friendly policies but then reverse them under political pressure. At the point where that 2009 legislative debate took place in Congress and my epiphany leading to this book occurred there were 23 states that had made a commitment to cap and trade. Within a year that was down to 10. Michigan, Michigan had pledged to be part of something called the Michigan Greenhouse Gas Reduction Act but it was done only through executive action of packed by governors at that time. Mixed parties at that time, it collapsed like a domino. So going to the first, I support, engage. I think what states can and should do is hugely important but to assume that you can staple each of those pledges together and add it up to something that even begins to approach Paris targets I just don't think is necessarily realistic based on what we've seen which then takes me back to the first part of your question. I have become increasingly skeptical of how far one can go and make major policy shifts in climate or anything else solely through executive action whether that's by a president or by a governor. One of the themes that I have noticed over the course of my career and time on this campus and looking environmental policy is that if you think of the presidencies that many of you but certainly I have experienced it is Clinton, Bush, Obama and thus far Trump. One of the common themes if you're looking at clean air, clean water, climate or anything else. This is a period where we've had every possible configuration of partisan control of American government. At times all Democratic, at times all Republican and mix it up any way you like. What has happened at every single stage is that a Congress and president have never gotten together on these issues. So what has happened is we have had presidency after presidency where the president tries to pull as far as he realistically can through interpretations that clearly happened as Mr. Obama succeeded Mr. Bush and now Mr. Trump moves in an opposite direction. That's not a way to set up a long term policy. It is just too brittle, it is just too vulnerable. And so to me the only way to move forward credibly on that given the confines of American politics is to think about the conditions under which some future Congress working with the executive branch can put something together because otherwise policies are just too vulnerable. Who's, if I'm gonna interrupt the momentum of it, I just wanna ask a quick follow up. Is there a global leader on this issue? I mean the United States has seated leadership under President Trump. Is it Emmanuel Macron? Is it Xi Jinping? Is there a global leader on this issue? I think there are two who are very interesting to watch right now, possibly three. One is what does China do and where does China go? There's a wonderful new book by my American university colleague Daniel Fiorino which really wrestles with the question of whether market-based or what we generally call authoritarian countries are better at dealing with an issue like climate change. A market-based system presumes those with market-based economies are better. We know that for all the discussion of decentralization and market-based reforms in China there are gonna be limits to that. It will be central command and control and yet with it initial exploration of a range of policies and strategies and tools to be determined that in a country where there's not only the substantial early threats of climate change rearing their head but broader air quality and other kinds of issues that are forcing the Chinese question. I actually think just across the border in Canada becomes a really, really intriguing test not just because they're our neighbor. If you look at the incredible strains on the Trudeau government which is facing re-election next year that is a prime minister who while fending off issues on trade and all the rest, the day of who apparently are gonna be moving toward a new NAFTA, whatever the new acronym is. What the prime minister is trying to do is to work with the province and develop a national strategy to reward and incentivize those provinces that have already acted aggressively in this area while creating incentives for other provinces to come and to play. I don't know if that is going to work but that's an example or an experiment of a very decentralized strategy. Third example would be from the European Union which I'm actually quite critical of in the book because it's so mightily struggled putting a cap and trade system together. It is an exhibit A, managerially and politically of how broad political will can be crushed by bad policy design and yet to its credit. And here I would say Angela Merkel who may not be longer into the chancellorship after a long reign has played a very substantial role in allowing a, this is too much inside baseball for cap and trade policy, a new stability reserve and other kinds of mechanisms that are not just wonky but have had to be fought off, fought out across the European Union with a chance that at last the European carbon pricing strategy might work. So those would be three cases to watch. Back to our audience, questions via Claire. I think we have time for one more question here. It comes from a student in your class. What is a crucial action that constituents take to bring carbon pricing closer to reality? I'm sorry, could you say the first part again? What is a crucial action that constituents take to bring carbon pricing closer to reality? I think that in the United States with the coming election this November and the fact that a great many governorships and legislative seats are gonna be under consideration. I think early 2019, those first months when all legislatures including those that meet on a part time basis and usually only come together and say January, February and March or the year after an election will be hugely, hugely influential for design development of policy that could really be impactful within an individual state and possibly then set the agenda for future opportunities and agendas. It doesn't mean that the only scale is statewide. There can be a local provision, there can be a campus provision but I would advise to focus less on the global international, where is the UN gonna go on this piece? Although that's important as well but begin to think about how you can actually take a compelling idea and make that attractive politically and make for that to work. I live with my family in a swing district, the 11th congressional district which is generally tilted Republican in the last six elections is very much in play this time around. Had a very compelling candidate for the US House actually show up at our doorstep just a few days before the primary. Had never met her before, she was saying climate change a top three issue. I said gee, what about a carbon price? What about a carbon tax? She kind of recoiled. Wrong house. She said not in this district, maybe down the road. Why, when, how might that change? We had an absolutely fascinating porch conversation. She's still gonna be pushing cash for clunker, she won the primary. But how do you do that? How do you make that real? And how does one begin to develop it? And with it pick up some momentum so that there's not just wins to show that gee, I gotta build through a legislature but that you can actually operationalize it and make it pass. As you can tell from all my comments, I'm really big on the don't just figure out how to get something done in the short term but think about how to really develop it and at a great university like this that underscores the fact that it involves all possible disciplines. This is not owned by the social sciences or the engineering sciences. It is truly an all hands on deck and however we come together as a community here or beyond, it's an amazing opportunity to have those kinds of conversations. You know that we have a couple of minutes left but that is such a perfect ending. I hate to step on it. So I think this is, any of you aspiring interviewers or documentary producers or anything like that? And I just, no, no. Then I'll still share a tip with you. I learned I took a documentary production course that was taught by a 60 minutes producer and she said the go-to question for all of their reports is now that we've reached the end of our interview, is there anything that I haven't asked you about that's important for people to understand about the issue because and the reason that question is so important is people like me have a fraction of the knowledge on the subject matter that we're interviewing an expert on and so we will, even the best prepared interview will miss something. So in the one minute we have remaining, what have we missed? I know chapter seven, page 185, if you're keeping score at home, talks about lessons from carbon pricing. Is there anything that we've missed in this discussion? It's been pretty far ranging. I appreciate the question, John, and all of your questions today. I think the one piece I would miss, would add is what I was saying in response to the earlier question. Discussion on this issue can't just be amongst people who agree, who have the same perspective, who don't produce oil and gas or know people who produce oil and gas and coal. We have to open up a broader conversation. Now, not only does that reflect sort of the deeper divides in our society, but for me, a larger question here is, where are we going in politics more broadly? Certainly on this issue. Is the purpose of politics to gather people who think like us somehow win an election and then that short window, Jim, as much through the process as possible until we lose with the terms of politics being tantamount to warfare, the other side comes in. Are there ways we can bridge, engage in these discussions and conversations? Not that we all agree in the end, but how do we begin to do that? I really think that's been missing in the United States. I think that's been missing all over the world on these kinds of issues. And so I would hope that we would not just be inward looking, thinking, gee, how do we want the world to look in a way that works for folks who think like us? But how do we open up and engage that problem? We haven't even talked about the climate adaptation side of things here, but we're also already dealing with adaptation questions and concerns, which are going to challenge all of us cutting across the political divides in some really, really significant ways. And so we need to be ready for that and to just to retreat to comfort zones and points of divide probably doesn't serve anybody terribly well. Thank you on behalf of a long-time Nittany line. Thank you for allowing me to be a Wolverine for a day. I sincerely appreciate it. And please join me. Here's the book. Here's the author. Thank you. Please join me in thanking Barry Rabe for all of his insights. Thank you.