 Welcome. This is quite an active event period for the University, but certainly the Center for Local, State, and Urban Policy, and we're delighted to have you with us. I'm Barry Rave. I'm a member of the faculty here at Ford and also the Director of Close-Up. I do want to thank our supportive cosponsors, all of whom are identified on the front of your program. As we continue, what I think is going to be a very, very interesting conversation today and is already proving to be a very interesting fall speaker series for us. The issue of climate policy or climate policy success is an interesting one. It was not that long ago that a great many world leaders held hands and raised them above their heads in Paris and talked about their commitment to reduce greenhouse gas emissions but also do something called carbon pricing. The challenge then becomes how do you take those commitments and translate those into policy? How would we design a climate policy in a world where our primary focus was economics and efficiency but then translate that into a world in which political factors and calculations have to enter in? This is not a new issue post-Paris. In fact, it is now almost 20 years since the Kyoto Protocol was agreed upon at which point there was a widespread consensus that the way to deal with the issue would be through a market-based policy, either a version of emissions trading or a cap and trade, possibly building on the U.S. experiment with sulfur dioxide, possibly a carbon tax or a price. In that case, year after year going by in the United States and other countries around the world where the idea did not disappear but the issue of how you operationalize that goal or that policy. What is the politics behind the adoption of a carbon pricing system? How do you launch that policy? How do you sustain and build support for it over time? And then over a longer period, does it really have much of an impact? Well, 20 years or so after Kyoto, it's really hard to look back in North America or anywhere else and say, here are the shining success stories. This is what has worked and why. And so we're particularly fortunate today to be joined by Lee Raymond. I've had a good fortune of knowing and Lee for many years. He's a faculty member professor of political science at Purdue, where he also directs the Center for Environmental Policy on that campus. Many of you will know his earlier work that really looks at the intersection of political science, political theory, and policy design and development, including some really, really interesting earlier work related to market-based policies, including the kinds of things that we're going to be talking about this morning. Today's title is very similar to the title on a new book, which was just published within the last week or two by MIT Press called Reclaiming the Atmospheric Commons. In that case, the subtitle is not a new strategy for climate policy success, but the regional greenhouse gas initiative and a new model of emissions trading. So that will be the topic as Lee looks at this intriguing, now nearly a decade-long experiment. And with it, places into the context of how we politically and normatively begin to think about the challenge of climate and the opportunities of carbon pricing going forward. So please join me in welcoming our guest, Lee Raymond. Thanks for having me. It seems fitting that, well, first thing I should say since Barry mentioned the book is you're all especially lucky because my publisher, when they heard that I was coming here to give this talk, said, oh, so you have to give everybody a discount on the book. So here is a 30% off. Probably too late for those of you who are already enrolled in Barry's class. I apologize for that. But nevertheless, if you're interested by what I have to say, I have flyers up here at Good Olmey through, I think, the middle of October. So there's my initial huxterism, but now that I've gotten that capitalist part out of the way. It's really nice to be here. I actually gave a talk here six years ago at the very beginning of this project at Barry's invitation. So it's a pleasure to kind of come back and full circle and talk a little bit about some of the reasons why I'm optimistic about carbon pricing, which is actually pretty difficult to be today. So I actually really thought I'd start after my optimistic title with a little bit of realism. So this is one of my favorite cartoons, right? Talking about the technological solution to our climate change crisis, which is a time machine that sends us back 50 years when we should have implemented a carbon pricing scheme. So this is in 2060. So we hopefully can avoid that fate of having to wait for that technology to be developed 45 years from now. But really, for those of us who study this problem, carbon pricing really feels a lot like that whale and we feel like the little people in that boat. So carbon pricing really is the mobidic of sort of environmental policy. So we've talked about it for years. We've talked about how this is the thing that we need to have. We even have cartoons saying that in 50 years we'll regret that we didn't have it, and yet it has been an incredibly difficult thing to obtain politically. And so partly today I'm going to talk a little bit about how a group of people were some of the first to really overcome that challenge. Maybe you want to extend my mobidic metaphor, right? One of the first groups to capture this white whale and actually implement a meaningful carbon price. And that's the Regional Greenhouse Gas Initiative, which is a partnership of the 10 states that you see here in Dark Green. Now nine, actually I talked about that more in Q&A, but at the time it was 10, who created a cap and trade program to reduce carbon dioxide emissions starting in 2008 from the utility sector. That was quite surprising in and of itself. Even more surprising was the fact that this group chose to make the people using that resource, the atmospheric commons, pay for that use. So in Reggie you had for the very first time ever the decision to auction or make the users of that atmospheric resource pay for that use. And indeed not just for a small number of these allowances, right, but for almost all of the emissions rights created by that program, which raises a really important question. If this is what carbon pricing looks like and that then I should use my pointer and this is what most of the policy actors trying to create carbon pricing look like, which I think Barry would agree with me is typically pretty accurate, how did this group sort of overcome those odds, right, and make this possible starting in 2003? And that's one of the things I want to talk a little bit about today. The short version of this story is that they really were able to use a new way of thinking about this problem, reframing this as an issue about a common resource that all of us own, rather than the sort of the atmosphere being something that is available to private polluters, because they have been traditionally using that and so we ought to recognize, right, that traditional right of use. Also critically, and I'll talk more about this, the key insight in Reggie was it was one thing to talk about making the polluter pay and environmentalists have been saying that for a long time, so if you've been studying environmental policy that's probably a very familiar idea. But the folks who were working on Reggie, I think, figured out from some of their failures that you couldn't just talk about who was going to pay, you really also had to talk about who should get paid. And this is one of the big omissions in a lot of actually market-based policy literature, going back to Coase and others, is we're really good at talking about who ought to pay and we're not as good at thinking about, but who should actually receive those payments, right, who should benefit from those payments. And Reggie's environmental entrepreneurs really were able to overcome that sort of deficit. So they did this, of course, in a cap and trade program. I will not spend a lot of time on this. This image is a pretty good sort of representative of what's going on when we talk about cap and trade. The two basic key ideas are that this is a bit of a misleading diagram, but it's pretty useful. Really, this should be one cap, right, that these two polluters are under. And the idea being that, of course, this firm, which is probably located in Indiana where I'm from, is emitting far too much pollution, right, much more than they have allowances for. And so this lovely firm that might be located in Michigan, who knows, are probably more likely located in a place out west, which is able to reduce emissions much more cheaply, right? So the economic theory is no problem. So here I am polluting like crazy in Indiana, but I will just give some money, right, to the folks who can make the emissions reductions that it's expensive for me to make. They'll make them more cheaply. I win, they win, everybody wins. So goes the theory, right, of cap and trade. And the environment wins because, although this, again, this sort of picture doesn't show it very well, all of that smoke, right, that's coming out of my cap actually fits, right, under this other company's cap, right? So we're really not actually polluting more. We're just moving that pollution around, right, to where essentially the cost of reducing it are as low as possible. So the paradigmatic example of this, and again, I won't spend a lot of time, this would be its own lecture, is the 1990 acid rain program, which reduced the emissions of sulfur dioxide from the electricity sector. This program is without any exaggeration, often called, well it used to be called living legend, actually now it's not living anymore, it's dead, it's been sort of put to rest by some other regulations, but at the time it was considered to be an incredible accomplishment in terms of reducing the cost of pollution, and also reducing emissions related to acid rain, as you can see from this image, right? So this is back when the law was enacted in 1990, and then this is 10 or 15 years later. So a very dramatic increase in pollution reduction at a relatively low cost using the cap and trade strategy. Okay, so having just talked about how great the acid rain program is, now I'm going to pour a little bit of sort of negativity on it, so that the acid rain program is really the classic example of what I call in the book and otherwise the old model of emissions trading. So the old model was good, but the old model had some problems. So the old model, like most old models, it had some problems, right? Really, because this was such a new idea in the old model of emissions trading, we paid very little attention to who got these rights initially. We were much more interested in what that cap was going to be, and we were much more interested in making sure that those polluters could make the trades that I just described, right? So we weren't that worried about who was going to get these allowances, but actually one group was worried about that, that was the emitters. So as a result, what you got effectively was kind of a default into a model of allocation of rights where we gave these rights away, we call it grandfathering, to the existing polluters. Again, stories complicated, but basically in rough proportion to their previous levels of emissions. This, it's worth noting, was completely contrary to what economists had been arguing for decades. They had been saying that you should be auctioning these rights, but that advice, as often unfortunately for my economics friends, was widely ignored in the political world in favor of this idea that we will just give these rights away largely to these politically influential, right? Large emitters. And so in the old model of emissions trading, we give these rights away, even though they have a tremendous amount of value in a way that I describe as sort of recognizing this Lockean norm, right? So if you've been using the resource, then you're entitled to having this value at this point. Okay. And again, having just said that, the Acid Rain Program for all of its successes, and it was very successful, is a classic example of this old model of emissions trading. Gave these allowances away for free. Very little discussion about allocation in the debate. That's not quite right. No discussion, though, about auctioning in the debate, right? So the discussion was only really about who was going to get a slightly larger, smaller share of allowances. And environmentalists at the time were really not paying attention to that allocation question, and that was important. And even more important, the success of this program, the ARP, really posed a problem then for anybody who wanted to deviate from that old model. Because the sense was, why would you change what is arguably the most successful environmental policy ever, including, for example, going to a mode where we actually sell allowances, right, rather than giving them away, or even other deviations from that Acid Rain Program model. So as you can see a lot, if you look at the Reggie story carefully, many of the actors in that story said we labored, right, under the shadow of the Acid Rain Program. It became incredibly difficult to persuade anybody to do anything that was different from that program, because that policy was considered to be so successful. But nevertheless, in Reggie, we had a different, we moved to this new model of emissions trading, and that's the story I want to tell a little bit about today, where instead of people not paying attention to allocation, now it's 10 or 15 years later, you have actually quite a bit of attention to allocation, including among environmentalists and regulators, not just among industry. So as a result, you have less control of that process by the large emitters and more influence over that process by environmentalists, right, and by regulators. And you also have this new way of framing this idea of auctioning that uses this public benefit frame that I'll talk about in a second. But the key for now is that instead of making efficiency-based arguments for auctions, that if we sell allowances, they will go to the person who values them highest, and so that's better, because I'm an economist and I want sort of people who value things the most to have them. Now we're talking about what's going to be fair in terms of allocation, right? Now we're going to talk about actually, if you want to use the commons, the atmospheric commons, you have to do that in a way that benefits the public. And that change was actually politically quite important, and I argue really made the shift to where we now assume more often than not that we're going to sell allowances rather than give them away. And that's an incredible transformation of this policy model, right? So again in the heyday of the acid rain program in the 1990s and even the early 2000s, if you would try to tell people that I'd be giving this talk in 2016 and talking about how auctions have become the new normal in emissions trading policy, people would have laughed you out of the room and said you were basically a lunatic, right? Or whatever you're smoking, I want some of it. So, all right, so there were some seeds of change for this, right, before we had Reggie, and it's important to note these because they're relevant but not sufficient to explain this change. You did see in the course of the 1990s gradual movement away from grandfathering to some little kind of embroidering on these ideas, right? We started talking about benchmarking and we started talking about set-asides, but we were still fundamentally talking about giving these rights away in this period. But in the meantime, in other areas, interestingly, like spectrum rights, which is a whole another somebody else either has or should write a book about this whole story, right? We moved into a model of actually no longer giving away a valuable public resource, right? And forcing companies to pay for those spectrum rights in the 1990s. That was important in showing the people who designed Reggie that you could write auction large and valuable kinds of sort of public rights in this way. We also saw in the 1990s the deregulation of our electricity markets, which had important implications for grandfathering really made it limited the power of regulators to prevent companies from essentially making a windfall profit off of grandfathered allowances. So under the Acid Rain program, we could tell ourselves that the public utilities commissions would prevent the power generators from capturing the value of these free allowances. But in a deregulated electricity market, you could no longer rely on the utility regulators to do that, right? So now you had more of a threat of a windfall profit for those generators from free allowances. And then finally, again, a long and interesting story that I will not have time to tell today. You had the emergence of these sort of mini carbon taxes in the 1990s, these public benefit charges or system benefit charges that were also quite important in basically both creating the programs that then programs like Reggie wanted to use auction revenue fund, things like energy efficiency programs and the like. And also again, sort of introducing the notion that we could charge people a little bit more, right, for their electricity consumption in this way. So the key here is that even with all of these changes, we had a very prominent discussion of the potential of auctioning allowances in the NOx trading programs, nitrogen oxide trading programs, in the 1990s, where at the end of the day, there was still a decision to really effectively do no auctioning whatsoever. And similarly, you had a fairly extensive discussion of auctioning in the early stages of the European Union's emissions trading system. And again, despite all of this arguing and all of these seeds of change, you had a decision to effectively auction almost no allowances. So the puzzle for us then becomes, so what happened in Reggie that was different, right, than these earlier cases? And so the argument that I want to make to you today and that I make in the book is that it was really this normative piece that was crucial. So when you talk about norms, you're at risk of sounding like at least for some economists and political scientists, like you're talking about these soft and fuzzy things like, oh, what's a norm and unwritten rules or appropriate behavior, who cares, right? That's for like teenagers, like what kinds of clothes should I wear? And it is those things, right? But it is also a profoundly influential way that we organize our daily lives. And in fact, the more people study norms, the more including political scientists and economists, they realize that the thing that explains 90% of your behavior today is not rules, it's not laws, and it's not economics, it's norms, it's social pressure, right? And so a great example of this is the image I have here. This is Aaron Burr fighting his famous duel with Alexander Hamilton, who noted, Hamilton that is, in his diary how stupid he thought it was, this norm of dueling the night before he went out in the morning and was killed in a duel. So this really shows you how powerful these can be, right? He felt so much pressure to live up to this norm, right? That even though he's saying to himself, this is dumb, I'm going to die, I don't even really believe in this sort of standard, right? He still went out and suffered this fate the next day. So here we are really understanding that norms are incredibly important in explaining our behavior and the behavior of political actors, right, and political outcomes. But unfortunately, although they've started to be integrated into our policy theories, they really have not been sufficiently integrated into our policy theories. And so the story I want to tell you today is that the key to explaining this change to reclaiming the atmosphere of commons in Reggie really relies on the insight of some environmental actors initially and then other people that if we reframe this whole notion in terms of a different set of norms, we give a different sort of conceptualization of the issue or what I call a normative frame, we can really change the politics of this issue. And a great example of this that I highly recommend to you in a wonderful book by Frank Baumgartner and others that has nothing to do with the environment but really gets at this idea is this book about the innocence frame for the death penalty and really compelling social science that indicates that if you continue to hammer away as many death penalty opponents have on the notion that it's normatively immoral for the state to kill one of its citizens, right, that that's the reason we should not have the death penalty, that that argument is really quite ineffective. But if you reframe the issue around the idea that we can never know for certain that we might not have an we might have an innocent person on death row, right, and you talked to people about the death penalty in that language, you suddenly have a very different ability to change people's attitudes because you've refrained that issue in terms of a different norm that we should not allow even one, we should not risk even one innocent person, right, potentially being put to death, right, which is a different argument to make. And it has a very powerful impact on people's attitudes towards the death penalty. And so the Reggie process I think can be explained in a very similar way of this kind of normative reframing. So this is the old normative frame. This is one of my favorite pictures of all time. So if you're from Chicago, you know what this is. But this says, again, do not park here, I shovel the snow, not you. So this is my favorite example of the Lockean norm in action. John Locke, who famously said that if I labor on something and it is not owned, then I now am entitled to ownership of that resource. So in cities like Chicago, Pittsburgh, Boston, other major urban areas, people have internalized this Lockean norm to say, if I have dug my car out of a public parking spot on a public street, I am now entitled to ownership of that parking spot. And this norm, like most norms, actually is actually enforced quite vigorously with extra legal activities. So if you actually make the mistake of moving this guy's chair and parking your car there, you will face very severe consequences. So this is the Lockean norm, which was clearly the old way of thinking about allocating emissions rights. And so environmentalists really proposed these alternative norms for this idea of allocation. They put forward on the one hand the more longstanding norm in environmental policy that polluters should pay. But in addition, crucially, they also thought very seriously about who should benefit from those payments. And here they seized upon the notion of kind of egalitarian shares for all, right? If we're going to have a policy that is about using a public resource, it's as important to make sure not only that the people who are using that resource pay, but that everyone benefits from that resource in a very tangible and sort of obvious way to the public at large. So I describe really a two or three-step process for doing this normative reframing. So the first step, if you want to take the strategies, you have to point out the sort of the poor fit of the original norm for the policy in question. And again, as others pointed out before me, the idea that we would give away pollution rights on the basis of a norm that says we should reward beneficial labor is definitely one of those arguments that really does not stand up to very long scrutiny when you actually think about it for more than about 30 seconds. And so as environmentalists pointed this out, right, they noted that really what you're saying basically, right, is that we're going to reward not a right of prior use, but a right of prior abuse. And when you sort of pull away that curtain, it becomes much harder for the generators and the people who are doing the polluting to sort of stand by this argument, right? Although they tried and they tried primarily by saying, well, but wait a minute, we did it this way in the asterine program and it works so well, why would you want to sort of mess that up, right? But this argument really made that argument much less effective. And instead, environmentalists noted, first of all, that the polluter should pay, which is a pretty straightforward norm, one that really goes back to what presumably most of your mother saw you, which is if you make a mess, right, you're responsible for cleaning up after yourself. But then also critically write this idea that if we're going to talk about using a public resource, we really need to make sure that the benefits of that use, right, those payments go to something that really benefits most or all of our citizens. And that was the key insight. And that brought us to what really was developed in Reggie, which is this what I call the new public benefit model, which is simply a combination of this new sort of framing, right, this new way of arguing for auctions, but then combined with a policy design that really fits that frame. So it's lovely to have a new frame to argue for a change in policy, but if you don't have a policy that really fits with that, you're really not going to make very much progress. And so the key in Reggie was thinking about ways to use auction revenue to deliver these tangible consumer benefits. And so in the Reggie case, the thing that environmental advocates seized upon were these public benefit programs, right? So wait, take this money, fund energy efficiency programs, right, for homeowners in our state, fund programs that lower the cost of zero or low carbon energy sources, all of which will basically lower the energy burden, right, the energy bill costs for consumers. This is going to make it possible for an elected official to support this program because when he or she is attacked, as they will be for saying, you're going to hurt your constituents by essentially raising their energy prices at a time when they can ill afford that, those elected officials can say essentially, well, higher energy rates do not equal higher energy bills, right, because I'm going to use this money in a way that will lower your energy consumption so you'll be using less energy, which means you'll pay less for your energy, right, even though you have this higher rate. And so this really was this public benefit model that was so successful in Reggie. Again, I can talk more about the details of that process in Q&A if people want. This is just a quick indication of a few important points in that five-year process to come to that decision. One thing worth noting is that this was a very bureaucratically driven process initially. There was this staff working group made up of non-elected officials from the 10 participating states who worked extremely intensively over the first couple of years on developing the proposal for Reggie. It's worth noting that contrary to some accounts of this process, the idea of auctioning did not emerge sort of late at the last minute, but it was actually something that environmentalists immediately seized upon at the very beginning when this idea was announced in 2003 and consciously decided that this was the place where they were really going to make an even more concerted effort to promote this new idea of auctioning based on this new normative framing. Consistent with that story, by the time we had the initial memorandum of understanding that was signed by at first seven of the Reggie states and then eventually all ten, you already had a commitment to what was already artfully being called the public benefit allocation. That was the language that got used instead of saying auction. People said public benefit allocation to stress this new framing. So really even by 2005, you had a firm commitment to sell at least a quarter of the allowances in the program. That was very early in the program. And at that point, things really sort of cascaded so that in 2006, you had a rapid deterioration of the situation, if you were a generator, to where you were actually immediately now fighting a rearguard action to try to only limit auctioning to a quarter of allowances. And so really by the end of 2006, you had a model rule that was now saying, well, so actually 25%, we really think of that as more the floor. That's not now a minimum for auctioning, right? Not in some ways a firm limit. And you even had some utilities and a few of the large energy consuming industries now saying, yeah, okay, actually in a lot of ways, auctioning would not be such a bad thing, especially if this revenue were used to defray these higher energy costs. So by the time that happens, really, the whole thing is over. And so although there's a little bit of kind of complaining in rearguard action, by the time the states adopt their policies in 2007, mostly in 2008, virtually all of them choose to auction, again, virtually all of their allowances, right? So more than 90% of all of the allowances in the program are actually auctioned. And again, this is a result that when you talk to the people, even who are involved in the process, one of the people I talked to, Franz Litz, who was the co-chair of that staff working group, said, when environmentalists, I'm paraphrasing here, but this is basically a direct quote, when environmentalists came to me in 2003 and said, not only do we want you to create a cap and trade program for greenhouse gas emissions among 10 states when the federal government can't solve this problem, not only do we want you to do that, we also want you to make the emitters pay for all those allowances. He looked at them like they had basically grown a second head, right? Like you've got to be kidding me, right? This is the craziest thing I've ever heard, right? How can we possibly be expected to do that? And ironically, by the end of the story, it was really the auctioning that was critical to making this policy politically sort of palatable for many of the elected officials who were involved. So without belaboring that point any further, I'll just note that the environmental advocates, people like Seth Kaplan, were really banging away on this point from literally day one, saying if we don't, again, to paraphrase this long quotation, we have to design this in a way that goes beyond just telling people we're solving climate change and also produces a benefit, a tangible benefit, he would say in other times, that people can get their arms around. And then even upon reflection, when I actually talked to Governor George Pataki, who was the governor of New York at the time and a big promoter of Reggie, again a rare nowadays, at the time he was a Republican who was actually supporting climate change policy, even he said, right? If you want to get serious about this, you have to recognize the difficult economic times and that the program has to not put new burdens on industry or consumers. So it was only through auctions, right? And then using that money to defray those sort of consumer costs that you could really make this program politically palatable in this way. So just to summarize that process, again, you really essentially had these environmental advocates first undermining, right, this initial private entitlement frame, which really did not have a very good fit with the problem. And then promoting a stronger sort of public benefit frame based on these other norms. And again, in the book, and I'm still basically standing by this, I don't know, the book's only been out for a few weeks, so I guess I should still stand by my predictions at this point, that I think is going to be much more stable. So in my mind, this idea of auctioning has got this much stronger sort of normative foundation. And so really we ought to see more programs moving in this direction if I'm right is what I'm arguing, right? If anything, we should see more programs going in the direction of auctioning and these public benefit frames. Okay. So the initial data on this is not entirely clear cut and I won't spend too much time, but the quick take home message is that basically that's true. Through 2015, so Reggie went into actual into operation in 2008, you've had a number of new cap and trade programs created. More than half of them, if you measure them by the sort of size of the number of allowances they generate, are programs that are auctioning either all or a majority of their allowances. Another third are in programs that are at least auctioning some of their allowances and only as of July of 2015, only about 10% are still in programs that are giving away all of their allowances. So you cannot dismiss Reggie at a minimum as sort of a blip, right? An exceptional blip. You've really had a pretty dramatic change at least in the 10 years that we've been looking at this issue through 2015 in this respect. And you also see a kind of a growing reliance on different forms of this public benefit framing. Again, I will not belabor these details too much, but even in Reggie, which was subjected to a lot of challenges, number of the governors who agreed on Reggie when it was first put into operation in 2008, left office, new people were elected and those new officials resisted efforts in most cases to repeal Reggie. And they did it primarily by really pointing out how useful this revenue had been for their residents, right? In the way that the state from New Hampshire governor John Lynch talks about, right? And not only did that allow Reggie to pretty much prevent states from defecting with New Jersey being the one important exception, but also allowed Reggie to take their program to a much more ambitious set of emissions goals. So the initial goals for Reggie were relatively modest, hold emissions constant, and then some very moderate declines in the first final few years of the program. But in 2012, in a program review, Reggie basically cut emissions for their region by almost 50%, so much more meaningful emissions target that was enabled by this new public benefit framing. And so really in Reggie, when we talk about all of this stuff for creating jobs, energy efficiency, reducing consumer costs, I would call this sort of consumer benefit framing, one type of this public benefit framing, right? But then we saw some sort of different flavors, if that's kind of the plain vanilla version of public benefit framing. In the EU, which also, in the wake of Reggie, moved towards auctioning the vast majority of its allowances. You got a slightly different spin. The focus in the EU was more on investing this money in R&D to develop new low and zero carbon technologies. So here the key is still a public benefit, right? We're not going to let you use this public atmospheric commons without benefiting the public, but the benefit here is more around climate protection, right, rather than consumer benefits. And then finally, even more interestingly, I would say, in the most recent example that I'll talk about, the US EPA's Clean Power Plan, which is just released last year, requires all US states to reduce their carbon and greenhouse gas emissions by 32% by 2030. You have the emergence of even another set of public benefits, right, which I would call these public health benefits, right? So you have people like Gina McCarthy, the EPA administrator talking now about carbon pollution, which is a very interesting rhetorical shift, and saying, really, the reason, again, to paraphrase this quote, that we ought to limit these emissions is, yeah, sure, climate change, but I don't even want to talk about that, right? Really, this is about childhood asthma. This is about the concentration of other pollutants associated with carbon that are very bad for people's health, right? And so this is this public health framing, which is really even a little bit more of a stretch, right, away from kind of that core public benefit framing that came out of Reggie, which was specifically focused, right, on kind of limiting the economic harms, right, of this policy. Now we've moved all the way to trying this strategy of saying, and actually this is really about benefiting the public in terms of reducing, right, childhood morbidity and public health problems. Okay. Also interesting, I think, and again, this is a longer conversation, but the programs that tried and failed to implement new sort of cap and trade policies after Reggie really did not follow the kind of Reggie model. So one of the most famous of these cases was the major conflict over the Waxman-Markey bill in the federal government, which went down in flames in 2010. And although there is much debate about what exactly happened in terms of explaining why that bill failed, I'm most persuaded by an argument by Theta Scotchpole and one that I think echoes my own looking at this problem, that really the basically the environmental advocates and the people supporting this bill were unable to respond to the criticism of the Republican right that this law is going to be devastating to the middle class, that you're going to raise energy prices for people who can't afford it. And this is at the time of the Great Recession at this point, right, so these are very hard economic times. And environmentalists and advocates for this bill were really left sort of speechless and didn't know what to say, right? Well, but we're fighting climate change and that's great, right? That should be enough. And really because the law did not include, right, the provisions to use allowance revenue in ways that really protected consumers, it left the supporters of that bill sort of powerless, right, before this very strong critique that emerged in the summer of 2010 about how this was going to be devastating to the middle class. And similarly in Australia, you had a little bit of the same kind of story. It's a little more complicated, but it's basically the same idea where we enacted a cap and trade program with auctions, but failed to really sufficiently connect that to consumer protections. And that really led to that bill being repealed in 2014. Okay. So let me finish by talking just a little bit about the future. So lots of predictions in sort of my review of Reggie and events subsequent to Reggie that really argue, right, that we ought to see this public benefit model continuing to be influential and indeed to be a little bit more controversial and sort of like the topic of the title of today's talk. Really the argument that I continue to make is that for all of its warts, cap and trade and really cap and auction and public benefit framing is probably the best strategy we have for promoting climate policy from a practical perspective, not from economic perspective, right, from a political perspective. So, okay, so let's do a little bit of work just to see whether that seems to be what's happening so far, right? And let's look at the clean power plan as a way of sort of dipping our toe into that water, which is what I want to do. So working with a couple of students, we've been looking a little bit at how debates over the implementation of this right EPA regulation has been playing out, what have the framing strategies been, what have the political results looked like. And so here basically, if I'm right or we're right, and this public benefit model really is this important political innovation, then we ought to see continued reliance, right, on these public benefit frames in these clean power plan debates. And we ought to see even more so that they're showing some strong political influence, right, which is a little bit harder thing to show, but we hopefully can show some of that as well. So one of those projects, we looked at a sample of the leading newspapers in every state of the 47 states that are affected by the clean power plan and coded those news coverage of those debates for a whole variety of different potential frames that people could be using about how to describe this controversy, including looking for all four of those different public benefit frames that I just described, right, consumer benefits, public health benefits, and also climate protection benefits, right, but then a whole host of other arguments as well, right, climate science frames, climate change is going to be devastating to our state in terms of sort of the local impacts of climate change, right, so lots of other frames we looked at, looked for as well, pro and con. So to boil an awful lot of data down to one very simple table, the most common frames in that data set across all states, both sort of pro and con are consumer benefit frames. So both by opponents, people criticizing the clean power plan, they were using these sort of again, this will be devastating to our citizens economically, it's going to ruin our economy, it's going to put people out of work, and people supporting, right, this idea that we should be doing something aggressive on climate change in our state. We're also saying now, obviously not that this is going to put people out of work, but the opposite, right, that this is a job creator, the clean power plan is a way to put our state and our residents out in front of the new economic wave, right, and sort of this kind of green jobs argument, renewable energy is the wave of the future. These are by far, actually the most common frames we found across all of these states, right. So nearly 40% of all of the articles in our data set featured at least one of these arguments in this type of framing. Interestingly, you also saw then some divergence. So opponents of action are still also stressing the notion of higher energy prices. So that's the third most common frame by opponents. At this point, people arguing in favor of these policies have not yet sort of adopted the kind of regi argument about using, again, auctions or something as a way to avoid, right, these kinds of problems. Instead, you're seeing more of this public health argument, right. So the kind of argument that again, this is maybe not that surprising since this is really the way the EPA has been framing this issue, right. You're really getting a lot of that being picked up as well by local advocates and people debating this issue at the state level. So this is pretty good evidence that we're not seeing a major shift away from this sort of public benefit framing. Notice some of the things that you're not seeing here, science, right, debate about science or a number of other things. You are seeing some other interesting things that I can't really talk about too much because I don't have time, but the kind of the legitimacy argument, right, the sort of constitutionality argument is very big in terms of opponents of the Clean Power Plan, saying this sort of, you know, beyond the EPA's actual legal authority, but not much about some other prominent climate arguments that are out there. Okay. And then finally, I'll just say a few things about a really interesting conflict that is happening in actually some detail around the Clean Power Plan. This is in Illinois, neighboring Indiana. And so Illinois back in 2015, again, a large environmental coalition put forward what they called the Clean Jobs Bill. So this image really says it all. What they are talking about when they promote this bill is jobs. They're not talking about climate. The bill is definitely not called, right, a climate bill. It's not even called an environmental bill, right, except for the language of, we're sort of clean, right? But it clearly draws on the same kinds of ideas that were so popular in Reggie, right? Investment in energy efficiency as a way, again, to protect consumers, right, and keep them whole, even if energy prices rise. And even initially this bill included a cap and invest program modeled on the Reggie model. And although this conflict has not been settled, this bill has had significant progress. And I think most people expect that the Illinois legislature will sometime in the near future adopt something that will include a lot of the provisions that were proposed by the proponents of this Clean Jobs Bill. So here again, doing a more qualitative assessment and really looking in depth at what's been happening in Illinois over the last two years, it's quite clear that the advocates for this bill are again stressing how this will benefit consumers in Illinois, that this will not put costs on constituents, that this will prevent the loss of clean jobs. This will put more dollars back in the wallets of Illinois families. These are all quotes, right, from key actors in this debate. Little bit of discussion about public health framing. Again, clean air means healthier people. But really, again, almost no discussion of climate change at all. So I wouldn't quite put this in the category that Barry first introduced of calling us a full-blown stealth policy. There is at least some recognition, right, that this has some connection to climate change. But that's really not what the political actors are talking about and it's definitely not what the advocates are talking about. What they are talking about is energy prices, right? And they're talking about a few other things that are unique to Illinois, like the potential economic effects of closing a couple of nuclear power plants. But really, this debate is very consistent with what we would expect, right, if this public benefit model were continuing to be politically influential. These folks are framing this issue in much the same way that we would expect them to. In addition, although it's harder to say this at this point, it seems quite evident that the provisions of the Clean Jobs Bill that are most consistent with that sort of consumer benefit framing are the ones that are likely to make it. So there's a compromise bill that's now being talked about in Illinois that is going to include some major new energy efficiency program and will also include some kind of reform of Illinois' renewable portfolio standard, and then may or may not include other provisions, right? And so again, although it's early, the early signs are that politically this framing and this way of thinking about the problem has still been quite influential, even in a state like Illinois, which is an interesting and complicated state politically and otherwise, right? So not a northeastern relatively liberal state, but a state that actually has more complicated politics and is located in the Midwest, burns a lot of coal, has a lot more going on. So that really suggests at least that the early signs are that this public benefit framing program may well continue to be influential, including maybe some of these public health benefits that people are talking about. Okay. So in the end, where does that leave us? I think it's indisputable, but maybe you'll all dispute this in Q&A, but I would say it's indisputable that public benefit framing really has just been pivotal in a dramatic shift in climate change policy post sort of 2005, 2003, and that the sort of the depth of that shift is still a little bit underappreciated. At the moment, early signs are that sort of ongoing debates about climate policy in the Clean Power Plan are consistent with the notion that that shift is enduring, right? And we'll continue. We'll see how that goes over the next five years, but so far, so good. But interestingly, we are seeing this kind of complexification of that public benefit framing. So in Reggie, the real main focus really was on consumers, right? We're going to keep consumers whole, and that was very efficacious politically. So then in some other states and in other places, we saw this kind of broaden out to a web, but we're also going to talk about how this is going to help protect you from climate through R&D and other programs, right? Or this is going to also right even protect public health. Seems clear that at the moment, advocates are more willing to use that public health framing, and they're still shying away from sort of the climate protection framing for, I think, some interesting reasons that we could talk about. But this, I guess, leads me to my last point, and this is a much broader point, but I think this work speaks to it. There's a big debate now in, I'd say, climate science and policy in general. Should we be talking about science? Should we be talking about policy, right? And so there's, I think, a group that's probably a minority still, but is growing in terms of their influence that is saying, really, climate science is not what's driving people's climate policy attitudes. So the kind of linear model that we have of science drives policy choice is wrong, even though that's very intuitive. Really, and lots of experiments even will indicate if you can frame a climate policy in a way that people are comfortable with, and then you ask them whether they believe in climate change, they're happy to believe in climate change. It's when climate change belief threatens what they think of, right, is their dominant sort of political or economic worldview, okay, then I can't believe in climate change, basically, right? I mean, that's not a conscious thought, but that's the way we think. So I think a lot of this work suggests that political actors have gotten this message, right, and that the political debate, although it was always partly about costs and benefits of policies, right, and policy design, is now more than ever explicitly about what's a fair policy and what's the right way to sort of allocate, right, the costs and benefits of these policies, what's the fair way to do that, and much less about arguing about whether climate change is real or not. So I think this work really suggests that that is an important thing to keep in mind. And then finally, I think some really, as hopefully with most work, right, that's at least interesting, lots of important questions going forward as this sort of notion of what's a public benefit, as advocates keep trying to sort of expand that idea, it'll be very interesting to see which of these arguments are persuasive and which are not, because you can imagine this sort of idea of a public benefit, just keep getting bigger and bigger and bigger until it actually sort of loses, right, its ability to convince people. That's an empirical question, right, that's something that we have to see how that works in terms of what forms of those public benefit frames will be persuasive going forward. And then of course, when I say that, you also have to talk about it in what context, right, because the kinds of normative arguments that maybe I find persuasive or people in Michigan find persuasive may be quite different than the ones that people find persuasive in Brazil or Russia or Australia or other places around the world where we'll be talking about these conflicts. And then finally, as I sort of this dual kind of question to fit, right, on the one hand, we're arguing about trying to figure out what kinds of public benefits I can fit into this new frame. But then I have to also figure out what kinds of policies, right, I can fit into this frame. And one of the things that you're seeing with the Clean Power Plan is at least some renewed interest in things like funding energy efficiency programs, but not necessarily through a cap and trade, right, or a cap and auction sort of program. So you're still talking about at some level making polluters bear the costs of their emissions. But you might or might not use an actual sort of cap and trade policy design to do that. And so this will also be interesting to see where that goes, right. So as states grapple with this Clean Power Plan mandate, what kinds of designs will people see as still fitting, right, with this notion of kind of public ownership, right, of the atmospheric commons in this way. I think will also be a really interesting question. Okay. So with that, I'll give a quick thanks to Heather Kahn and Lindsay Hummel who did a lot of the research on some of those Clean Power Plan projects that are just undergoing and give you the final sort of plug for my book and be happy to open it up for questions.