Order Code 98-738 ENR
CRS Report for Congress
Received through the CRS Web
Global Climate Change:
Three Policy Perspectives
Updated February 9, 2007
Larry Parker and John Blodgett
Specialists in Energy and Environmental Policy
Resources, Science, and Industry Division
Congressional Research Service ˜ The Library of Congress

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Global Climate Change: Three Policy Perspectives
Summary
The 1992 U.N. Framework Convention on Climate Change requires that
signatories, including the United States, establish policies for constraining future
emission levels of suspected greenhouse gases, including carbon dioxide (CO ). The
2
George H. W. Bush, Clinton, and George W. Bush Administrations each drafted
action plans in response to requirements of the convention. These plans have raised
significant controversy and debate.
This debate intensified following the 1997 Kyoto Agreement, which, had it been
ratified by the United States, would have committed the United States to reduce
greenhouse gases by 7% over a five-year period (2008-2012) from specified baseline
years. Controversy is inherent, in part, because of uncertainties about the likelihood
and magnitude of possible future climate change, the consequences for human well-
being, and the costs and benefits of minimizing or adapting to possible climate
change. Controversy also is driven by differences in how competing policy
communities view the assumptions underlying approaches to this complex issue.
This paper examines three starting points from which a U.S. response to the
convention is being framed. These starting points, or policy “lenses,” lead to
divergent perceptions of the issue with respect to uncertainty, cost and benefit
accounting, and urgency. They also imply differing but overlapping processes and
actions for possible implementation, thus shaping recommendations of policy
advocates concerning the federal government’s role in reducing greenhouse gases.
A technological lens views environmental problems as the result of
inappropriate or misused technologies. The solutions to the problems lie in
improving or correcting technology. The implied governmental role would be to
provide leadership and incentives for technological development.
An economic lens views environmental problems as the result of inappropriate
or misleading market signals (prices). The solutions to the problems lie in ensuring
that the prices of goods and services reflect their total costs, including environmental
damages. The implied governmental role would be to improve the functions of the
market to include environmental costs, so the private sector can respond efficiently.
An ecological lens views environmental problems as the result of indifference
to or disregard for the planet’s ecosystem on which all life depends. The solutions
to the problems lie in developing an understanding of and a respect for that
ecosystem, and providing people with mechanisms to express that understanding in
their daily choices. The implied governmental role would be to support ecologically
based education and values, as well as to promote “green” products and processes,
for example through procurement policies and labeling requirements.
Some initiatives are underway; all the perspectives are relevant in evaluating
them and possible further policies. The purpose here is not to suggest that one lens
is “better” than another, but rather to articulate the implications of the differing
perspectives in order to clarify terms of debate among diverse policy communities.

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Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Three Lenses for Viewing Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Technological Lens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Application to Global Climate Change . . . . . . . . . . . . . . . . . . . . . . . . . 7
Economic Lens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Application to Global Climate Change . . . . . . . . . . . . . . . . . . . . . . . . 14
Ecological Approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Application to Global Climate Change . . . . . . . . . . . . . . . . . . . . . . . . 22
The Three Lenses and Policy Approaches . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Cost Analysis as Viewed Through the Lenses . . . . . . . . . . . . . . . . . . . . . . . 25
Technological Lens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Economic Lens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Ecological lens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
The Role of Science as Viewed Through the Lenses . . . . . . . . . . . . . . . . . . 28
Federal Policy As Viewed through the Lenses . . . . . . . . . . . . . . . . . . . . . . 29
Conclusion: Balancing the Three Lenses to Develop Policy . . . . . . . . . . . . . . . 33
List of Tables
Table 1: Results of 2000 Interlaboratory Working Group Study . . . . . . . . . . . . 10
Table 2. Influence of the Lenses on Policy Parameters . . . . . . . . . . . . . . . . . . . . 31
Table 3. Summary of Lenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Table 4. Review of Lenses Across Different Policymaking Criteria . . . . . . . . . . 34

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Global Climate Change:
Three Policy Perspectives
Introduction
Even as the possible role of human activities affecting global climate is being
actively debated, national and international climate change policy actions are
underway.1 As a party to the United Nations Framework Convention on Climate
Change, the United States committed to the objective of achieving “stabilization of
greenhouse gas concentrations in the atmosphere at a level that would prevent
dangerous anthropogenic interference with the climate system”; and to preparing
“national action plans” to address emissions of greenhouse gases.2
The domestic debate intensified with the negotiations relating to the Kyoto
Protocol, agreed to in December, 1997.3 Specifically, under the terms of the Kyoto
Protocol, the United States would have committed to reducing its average annual net
carbon-equivalent emissions of six gases by 7% below specified baseline years over
the five-year period 2008-2012.4 If it had been ratified by the Senate, the Kyoto
Agreement would have moved the debate beyond the mix of “study,”5 “no regrets,”6
1 This paper discusses policy perspectives on the issue and potential actions, but not the
underlying controversy concerning the reality and urgency of global climate change —
sometimes more narrowly termed “global warming.” For background, see CRS Report
RL33849, Climate Change: Science and Policy Implications, by Jane A. Leggett.
2 The Senate consented to ratification of the U.N. Framework Convention on Climate
Change on October 7, 1992, with a two-thirds majority division vote; President H. W. Bush
signed the instrument of ratification of the Convention on October 13, 1992.
3 On the agreement, see CRS Report RL33826, Climate Change: The Kyoto Protocol and
International Actions, by Susan R. Fletcher and Larry Parker.
4 On specifics of the Kyoto reduction requirements, see CRS Report 98-235, Global Climate
Change: U.S. Greenhouse Gas Emissions — Status, Trends, and Projections, by Larry
Parker and John Blodgett.
5 Focusing on the study of global climate processes, with particular attention to the potential
human role in causing change, this approach implies that taking action to regulate human
activities on the basis of possible impacts of global warming should await further
information verifying the need. This is not simply to ignore the problem, because it implies
focused research with additional resources. Arguably, too, such research would be
necessary to support decisions if action were deemed necessary. For a review of federal
investments in climate change-related research, see CRS Report RL33817, Climate Change:
Federal Expenditures, by Jane Leggett.
6 Adopting a “no regrets” policy can be summarized as assessing policy options across the
(continued...)

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CRS-2
and “voluntary actions”7 policies of the George H. W. Bush, Clinton, and George W.
Bush Administrations.
The Clinton Administration, however, never submitted the Kyoto Protocol to
the Senate,8 and subsequently President George W. Bush rejected it outright. In lieu
of the approach of the Kyoto Protocol, featuring binding commitments to reduce
emissions by developed and transitional nations, President George W. Bush proposed
a two-pronged approach: one to focus on further research and development to better
characterize global climate change and its causes, the other to reduce the amount of
greenhouse gases emitted per unit of economic activity through voluntary actions.
In addition, on July 27, 2005, the Bush Administration announced formation of a six-
nation Asia-Pacific Partnership on Clean Development and Climate (APP),9 with the
goal of meeting “national pollution reduction, energy security and climate change
concerns, consistent with the principles of the U.N. Framework Convention on
Climate Change (UNFCCC)” through “a voluntary, non-legally binding framework
for international cooperation.”10
Because of the uncertainties associated with global climate change — the extent
to which global climate change is occurring, what the effects might be and their
magnitude, the economic and social consequences that would follow from actions to
6 (...continued)
range of federal activities for their potential impact on global climate change, and where
alternative policies to achieve a goal otherwise appear similar, adopt the one most consistent
with protecting against the risk of global climate change. The idea of “no regrets” derives
from the presumption that even if global climate change proves a false alarm, one would not
regret adopting policies that are protective if there were no additional (or at most minimal)
costs and the policies were justified on other grounds (e.g., have other environmental
benefits or energy security benefits).
7 These steps included longer-term research and development and incentives focused
primarily on more energy-efficient buildings, industrial cogeneration and control of minor
greenhouse gases, fuel efficient vehicles, and reducing carbon emissions in electricity
generation. These actions could be classed as consistent with a “no regrets” approach, the
Framework Convention, and U.S. energy policy as articulated in the Energy Policy Act of
1992.
8 In July, 1997, prior to Kyoto, the Senate agreed by a unanimous vote 95-0 to S.Res. 98,
stating that the Clinton Administration should not accept an agreement that would seriously
harm the economy or that did not require developing countries to meet appropriate reduction
requirements. The Clinton Administration signed the agreement, saying that costs would
not be excessive (particularly because it included emissions trading and joint
implementation provisions), and said it would be encouraging developing nations to
participate. But the Clinton Administration never submitted the Agreement to the Senate.
9 The other members are China, India, Japan, Australia, and South Korea.
10 Charter for the Asia-Pacific Partnership on Clean Development and Climate (Jan. 12,
2006), “Purposes,” 2.1.1. For additional information on APP, see
[http://www.asiapacificpartnership.org/] and “Asia-Pacific Partnership on Clean
Development and Climate: New Vision Statement of Australia, China, India, Japan, the
Republic of Korea, and the United States of America” [http://www.state.gov/g/oes/
climate/app/75320.htm].

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CRS-3
reduce emissions of greenhouse gases, the relationships between emissions and
economic activity, the costs of actions or of taking no action, the time frame of
impacts, etc. — each individual’s perception of what, if anything, to do is strongly
influenced by personal and community values, perceptions of human progress and
adaptability, experience, education and training, and outlook in how to cope with
risks and uncertainty.11
These differing perspectives of persons affect their observations and
interpretations of the issue, influencing their decisions on whether policy
interventions are necessary and, if so, what kinds of intervention. At the same time,
personal perspectives can change; new knowledge, education, and/or moral suasion
may impact on policymaking and individual and corporate behavior, and may also
be necessary to create conditions for successfully implementing initiatives relating
to climate change.
Three Lenses for Viewing Solutions
The many personal proclivities and professional constructs that help shape an
individual’s perspectives on environmental issues in general, and global climate
change in particular, can be grouped into three perspectives that affect proposed
policies. These perspectives, which can intertwine and overlap, are:
! that environmental problems are the result of inappropriate or
misused technologies, and that the solutions to the problems lie in
improving or correcting technology;
! that environmental problems are the result of market failures, and
that the solutions to the problems lie in ensuring that market
decisions take into account all costs, including environmental
damages; and
! that environmental problems result from a combination of ignorance
of, indifference to, and even disregard for, the ecosystem on which
human life ultimately depends as well as for the other living
creatures that share the planet; and that the solutions to
environmental problems lie in developing an understanding of and
a respect for that ecosystem and in providing mechanisms for people
11 Implications of differing perceptions are discussed in, for example, Steven Kelman, What
Price Incentives: Economists and the Environment (Boston: Auburn Publishing Co., 1981);
Lester B. Lave and Hadi Dowlatabadi, “Climate Change: The Effects of Personal Beliefs
and Scientific Uncertainty,” Environmental Science and Technology, Vol. 27, no. 10 (1993),
1962-1972; Richard B. Norgaard and Richard B. Howarth, “Climate Rights of Future
Generations, Economic Analysis, and the Policy Process,” in U.S. Congress, House,
Committee on Science, Space, and Technology, Technologies and Strategies for Addressing
Global Climate Change, Hearings, 17 July 1991 (Washington, D.C.: U.S. Govt. Print. Off.,
1992), pp. 160-173; and “Science and Nonsense in the Global Warming Debate,” ENDS
Report 233 (June 1993), 21-23.

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CRS-4
to express the priority they place on the environment in their daily
choices.
Each of these perspectives can be considered a “lens” through which individuals
and policy communities view the issue — a lens that provides a particular focus on
the nature of the problem and for the kinds of actions to solve it.12 For shorthand,
they might be termed the technological lens, the economic lens, and the ecological
lens, respectively.
Each perspective and its associated policy approaches generally are sufficiently
distinct that a dominating tendency in policy options can be discerned. As policy
frameworks, these lenses incorporate terminology and methods associated with
diverse academic disciplines and professions, including not only engineering,
economics, and ecological sciences, but also various social sciences, jurisprudence,
theology, and others. As policy frameworks, they should not be confused with any
one academic discipline or profession;13 rather, they are perspectives on
policymaking, on how to focus on a policy issue.
While the lenses can be analyzed as distinct perspectives, most of the time for
most people they represent predilections rather than conscious alternatives.14 The
lenses differ primarily in what aspects of the issue come into focus, resulting in some
being magnified, others obscured, or even distorted. The appropriateness of this
focusing is dependent on the characteristics of the specific issue and the orientation
of the policymaker. Thus, a policymaker viewing global climate change through one
lens — say, the technological lens — is not necessarily disregarding economic or
ecological factors, although these factors tend to lie outside, and may be less
discernible, than the more clear focus on technological options.
Ultimately, given the diversity of policymakers and the potential overlapping
of viewpoints, any global climate policy considered will likely involve a mix of
initiatives representing all of the perspectives. Such a mix may reflect mutual
accommodation as much as conscious agreement that a combination of approaches
better ensures progress toward mitigation goals. The purpose here is not to suggest
that one lens is superior to another, but rather to articulate the differing perspectives
in order to facilitate communication among different parties and interests.
Technological Lens
Background. Viewed through the technological lens, an environmental
problem is an “opportunity” for ingenuity, for a technical “fix.” This technologically
12 No further action on global climate change, or setting a policy of no federal government
role are options, as well.
13 Hence, the economic lens should not be confused with the academic discipline of
economics, nor the ecological lens with ecological science. The frameworks are broader
than any single discipline, incorporating a range of policy-relevant perspectives, depending
on the personal experiences and knowledge of the policymaker.
14 See Marco Janssen and Bert de Vries, “The Battle of Perspectives: A Multi-Agent Model
with Adaptive Responses to Climate Change,” Ecological Economics 26 (1998), 43-65.

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CRS-5
driven philosophy focuses on research, development, and demonstration of
technologies that ameliorate or eliminate the problem. Many uncertainties can be
ignored if technology is available to render them irrelevant (a presumption underlying
the “pollution prevention” concept, for example). From this perspective, policy
entails the development and commercialization of new technologies; government’s
role can include basic research, technical support, financial subsidies, economic
mechanisms, or the imposition of requirements or standards that stimulate
technological development and that create markets for such technologies.
The relationship between environmental protection and technological
development was recognized early in the environmental debates and policymaking
of the 1960s and 1970s. Particularly in the area of mobile source pollution control,
standards anticipated technological development to achieve emissions reductions —
commonly called “technology-forcing.” Although some in industry argued that this
was not an efficient means of encouraging technology (particularly when the
deadlines for compliance were short), the process undoubtedly stimulated
development.
A “technology-forcing” approach to environmental policy is generally
associated with pushing private sector research and development in a socially desired
direction (for example, forcing the automobile industry to meet more stringent
emission standards than technologically feasible at the time the standards were set).
Technology-forcing requirements have also been imposed on public sector programs.
For example, the Solid Waste Disposal Act was amended in 1992 to subject the
Department of Energy (DOE), which is responsible for generating the bulk of the
Nation’s mixed waste,15 to penalties for violating the Act’s requirements with respect
to handling and disposing of such waste. Because of inadequate treatment
technology available at the time, DOE was required to submit a plan to develop such
treatment capacities and technologies to treat all DOE mixed wastes by 1995 (sec.
3021(b)). Failure to comply was subject to penalties against DOE by EPA.16
Regulatory mandates can directly stimulate the commercialization of technology
by creating market opportunities. These mandates can be performance-based (meet
an emissions level), or technology-based (specify the performance of the technology
used). For example, California and 11 other states have enacted legislation
mandating that greenhouse gas emissions from new passenger vehicles be reduced
15 Mixed waste consists of both radioactive and hazardous materials. The radioactive
material in DOE mixed waste may be low-level, transuranic, or high-level, depending on the
activity that generated the waste. The radioactive material is subject to the Atomic Energy
Act (AEA), and the hazardous material is subject to the Resource Conservation and
Recovery Act (RCRA). Although both statutes are generally consistent, Section 1006(a) of
RCRA grants precedence to the AEA for certain provisions that may differ.
16 DOE proposed treatment plans for its mixed waste sites to EPA and relevant states in
1995, most of which were approved later that year. For information on the status of the
remaining plans and site locations, see EPA’s website at [http://www.epa.gov/radiation/
mixed-waste/mw_pg12.htm].

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CRS-6
by 22% in model year (MY) 2012 and 30% in MY2016.17 The degree to which these
sorts of mandates have forced technologies has depended on the perceived
seriousness of problems (resulting in accelerated time frames for development, and
in very high levels of required performance), the ease of developing the needed
technology, and the impact of anticipated costs on consumers.
Along with the use of a regulatory approach to forcing technology, the federal
government has also taken an active role in assisting private industry in developing
pollution control technology. Some environmentally important industries did not
have strong research and development sectors in the late 1960s and 1970s, or did not
have ones that could easily be redirected toward pollution control. This led to
governmentally directed research and developmental efforts toward pollution control
technology. For example, the EPA spent approximately $2 billion supporting
development of a feasible flue gas desulfurization (FGD) device for electric utility
use to control sulfur oxides. At that time (late 1960s), the utility industry had no
central research effort (the Electric Power Research Institute (EPRI) was not started
until 1972), and individual utilities devoted their engineering efforts to improving
mechanical efficiency of generation, not the chemical engineering necessary for
desulfurization. Many utilities also were opposed to adding a chemical process on
their plants, preferring other control techniques, such as tall stacks and low sulfur
coal. The success of the Government’s efforts is indicated by the fact that the FGD
device is now the performance and reliability standard by which new, emerging
control devices are measured. The federal government has also promoted the
development of hybrid electric and fuel cell vehicles in the United States through
joint government-industry research and development aimed at the introduction of
high efficiency cars and trucks, as well as tax incentives for the purchase of new
advanced technology vehicles.18
The technological lens reflects a traditional American “can-do” faith in
technology, and in the country’s ability to find a “technology-fix” to meet the needs
of most problems. Such an approach attempts to increase the effectiveness of
technology so that social problems can be solved at little or no additional cost.
Consumers’ desires and needs are taken as a given. The technological response is an
effort to achieve an acceptable level of environmental protection without unduly
restricting the choices available to those consumers. For example, consumers want
to drive. Viewed through the technological lens, policymakers see their role as
making that activity less environmentally harmful at minimal cost to consumers, not
as restricting that desire or even necessarily as offering alternatives to driving such
as mass transit. Efforts to diminish consumer use of the automobile would be seen
as a last resort. The technological lens provides a view of the economy in which
technology permits consumers to continue their preferred behaviors while
concomitantly achieving environmental goals. It is not necessary for consumers to
change their behavior significantly to adjust to the “new reality” of an
environmental problem.
17 See CRS Report RL33413, Automobile and Light Truck Fuel Economy: The CAFE
Standards, by Brent Yacobucci.
18 See CRS Report RL33654, Alternative Fuels and Advanced Technology Vehicles: Issues
in Congress, by Brent Yacobucci.

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CRS-7
Application to Global Climate Change. Viewed through the technological
lens, global climate change is seen as a problem requiring a reorientation of the
energy sector from carbon-based fossil fuels to a more “environmentally friendly”
energy system based on renewables and conservation. As stated by Worldwatch
Institute:
The end of the fossil fuel age is now in sight. As the world lurches from
one energy crisis to another, fossil fuel dependence threatens at every turn to
derail the global economy or disrupt its environmental support systems. If we are
to ensure a healthy and prosperous world for future generations, only a few
decades remain to redirect the energy economy.19
This view was reflected in a speech of President Clinton on April 21, 1993: the
challenge of global climate change “must be a clarion call, not for more bureaucracy
or regulation or unnecessary costs, but instead for American ingenuity and creativity,
to produce the best and most energy-efficient technology.” The focus on technology
was evident in the Clinton Administration’s 1993 Climate Change Action Plan:
These [long-term] policies must address technologies of energy supply and use,
and condition markets for the long-term transition away from activities, fuels,
and technologies that generate large emissions of greenhouse gases.
The policies contained in the Action Plan are directed primarily at creating
effective markets for investments in existing or nearly commercially available
technology that reduce greenhouse gas emissions. The core of a long term
strategy must ensure that a constant stream of improved technology is available
and that market conditions are favorable to their adoption. The Action Plan is
likely to stimulate a modest acceleration in technological development.... Such
gains will lay the foundation for the development of technologies that could
contribute to significant reductions in greenhouse gas emissions in both the
United States and abroad....
Research and development into the technologies that could contribute to
greenhouse gas emission reductions will be a critical part of the long term
effort.20
These views were reiterated in President Clinton’s 1998 $6 billion Climate
Change Technology Initiative. As stated by then National Economic Council Chair
Gene Sperling:
We think that this [Climate Change Initiative] package is a very good example
of what we spoke about when we said that there were win-win opportunities for
positive incentives that would clearly show how we can address the issue of
climate change and strengthen our economy at the same time.21
19 Christopher Flavin and Nicholas Lenssen, Beyond the Petroleum Age: Designing a Solar
Economy (Washington D.C.: Worldwatch Institute, December 1990), p. 5.
20 William J. Clinton and Albert Gore, Jr., The Climate Change Action Plan (October 1993),
p. 29.
21 As reported in Daily Environment Report, “Administration Announces $6.3 Billion Plan
(continued...)

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CRS-8
This “win-win” perspective on climate change policy also represents the core
of the George W. Bush Administration’s approach. The President stated that his
alternative could “grow our economy and, at the same time, through technologies,
improve our environment.”22 In supporting his new National Climate Change
Technology Initiative, he stated:
America’s the leader in technology and innovation. We all believe technology
offers great promise to significantly reduce emissions — especially carbon
capture, storage and sequestration technologies.

So we’re creating the National Climate Change Technology Initiative to
strengthen research at universities and national labs, to enhance partnerships in
applied research, to develop improved technology for measuring and monitoring
gross and net greenhouse gas emissions, and to fund demonstration projects for
cutting-edge technologies, such as bioreactors and fuel cells.23
This technology focus also is the central element of the Asia-Pacific Partnership:
“to facilitate the development, diffusion, deployment, and transfer of existing,
emerging and longer term cost- effective, cleaner, more efficient technologies and
practices among the Partners through concrete and substantial cooperation so as to
achieve practical results.”24
Looking through the technological lens, policymakers may see technological
development as cost-effective, thus improving the economy, not penalizing it. This
“win-win” perspective appeared clearly in the George W. Bush Administration’s
2002 Climate Action Report, submitted in accordance with the United Nations
Framework Convention on Climate Change: “President [George W.] Bush said last
year [2001] that technology offers great promise to significantly and cost-effectively
reduce emissions in the long term. Our national circumstances — our prosperity and
our diversity — may shape our response to climate change, but our commitment to
invest in innovative technologies and research will ensure the success of our
response.”25 According to proponents, the cost of a technological approach to the
climate change issue appears to net out to zero, or even to save money, depending on
how the benefits from increased efficiency are estimated.
21 (...continued)
of Spending, Tax Credits to Curb Emissions,” February 2, 1998, p. AA-1.
22 Response to Questions by President George W. Bush at the National Security Agency’s
Operations Center, Fort Meade, Md (June 4, 2002). Reported in “Bush Defends Voluntary
Policy to Slow Emissions Rather Than Mandating Cuts,” Daily Environment Report (June
5, 2002) p. A-13.
23 Statement of President George W. Bush on Global Change (June 11, 2001)
[http://www.whitehouse.gov/news/releases/2001/06/20010611-2.html] .
24 Charter for the Asia-Pacific Partnership on Clean Development and Climate (January 12,
2006), “Purposes,” 2.1.1 at [http://www.asiapacificpartnership.org/].
25 Department of State, Climate Action Report: 2002 Submission of the United States of
America Under the United Nations Framework Convention on Climate Change, Department
of State, November 2002, p. 5.

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CRS-9
The technological lens tends to focus cost-benefit analysis on a “bottom-up”
methodology that evaluates the relative costs of projected compliance techniques.
As summarized by National Academy of Sciences, “technological costing develops
estimates on the basis of a variety of assumptions about the technical aspects,
together with estimates — often no more than guesses — of the costs of
implementing the required technology.”26 Assumptions are technological, in terms
of technological performance; economic, in terms of cost-effectiveness; and
behavioral, in terms of penetration rates.
In 1991, the Congressional Office of Technology Assessment (OTA) conducted
a “bottom-up” analysis using two CO control scenarios: (1) a moderate scenario
2
focused on available technical options that are cost-effective on a life-cycle basis and
seen as presenting no massive problems in terms of market penetration; and (2) a
tough scenario focused on the best-available technical options with less concern
about difficulties in market penetration. OTA estimated the moderate scenario would
reduce a projected 50% increase in CO emissions from 1987 to 2015 to about 22%.
2
In contrast, OTA estimated that the tough scenario would reduce CO emissions to
2
about half their projected 2015 levels, or 29% below their 1987 levels in the year
2015.
OTA estimated that the moderate scenario is achievable at a net savings to the
economy; overall fuel savings (such as oil, assumed in the year 2015 to cost about
$50 a barrel) would exceed annual operating costs of the control measures. With cost
estimates for the tough scenario reflecting more uncertainty about the annualized
capital and operating costs of proposed control measures,27 OTA estimated a range
for the tough scenario from a net savings of $22 billion to a net cost of $150 billion
annually in the year 2015.
DOE’s five National Laboratories — Oak Ridge, Lawrence Berkeley, Argonne,
National Renewable Energy, and Pacific Northwest — conducted a more recent
effort in the year 2000 to estimate the benefits of a technological approach for
reducing carbon emission.28 The five laboratories analyzed scenarios for
technologies to reduce carbon emissions in a cost-effective manner (see Table 1).
In discussing their results, the National Laboratories concluded:
In both the Moderate and Advanced scenarios and in both timeframes (2010 and
2020), the estimated annual energy bill savings exceed the sum of the annualized
policy implementation costs and the incremental technology investments. This
26 National Academy of Sciences, Policy Implications of Greenhouse Warming
(Washington, D.C.: National Academy Press, 1991), p. 48.
27 OTA estimated the annualized costs of the tough scenario in a range of $350-$570 billion
annually; net costs subtract fuel savings. See Congressional Office of Technology
Assessment, Changing by Degrees (Washington D.C.: U.S. Govt. Print. Off., 1991), p.
321.
28 Interlaboratory Working Group, Scenarios for a Clean Energy Future, ORNL/CON-476,
November 2000.

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finding is consistent with many economic-engineering studies and with the views
of many economists.29
Table 1: Results of 2000 Interlaboratory Working Group Study
(Results for the year 2010)
Direct Costs
Energy Savings
Carbon Savings
Scenario
(billion 1997$)
(billion 1997$)
(MtC)
Moderate Case
$16.0
$55.3
85-90
Advanced Cases
$41.5
$89.2
230-332
Source: Interlaboratory Working Group, Scenarios for a Clean Energy Future, November
2000.
Such a conclusion immediately raises the question: “If technological fixes such
as enhanced energy efficiency could actually save money, why aren’t people
voluntarily doing it now?” One possible answer is that the projections are wrong: the
technological fixes are mirages, and the market has correctly ignored them. An
alternative answer, the one focused on by the technology lens, is that widespread
commercialization of these technologies is blocked by technological, economic, or
institutional barriers. For example, a barrier might be that the initial cost of an
energy efficient appliance is higher than a lower efficiency alternative, even though
the lifetime cost is less; this can be a barrier to a purchaser who is not aware of the
comparative life time costs and/or who cannot afford the upfront cost despite the
long-term savings. An activist viewing the problem through the technology lens
would look to methods for overcoming that barrier, such as providing information
on lifetime costs and/or financial help.
Technology proponents tend to look favorably on governmental assistance in
overcoming such barriers. This assistance can include public sector research,
development, and demonstration efforts; incentives to private enterprise through
direct funding, beneficial tax treatment for research expenditures, and cost-sharing
programs to help overcome technical barriers and to improve the conditions for
commercialization; governmental subsidies to technology; indirect incentives that
make existing technologies less attractive than new ones (such as a carbon tax);
regulatory interventions that create markets for new technologies; and regulations to
address institutional and market barriers, such as energy efficiency labeling
requirements. For example, The George W. Bush Administration’s Climate Change
Initiative seeks $4.6 billion over five years in tax incentives to spur development of
renewable energy, hybrid and fuel cell vehicles, cogeneration, and landfill gas
conversions.30 Some of these incentives (e.g., hybrid and fuel cell vehicles tax
credits) were enacted as part of the Energy Policy Act of 2005.
29 Ibid., p. 1.28.
30 White House, Global Climate Change Policy Book, February 2002. Available at
[http://www.whitehouse,gov/news/releases/2002/02/climatechange.html].

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The technology lens focuses attention on two basic issues: what drives
technological development, and what barriers impede it. From this perspective,
government can help stimulate the former and help remove the latter. For those who
envision technological fixes that can achieve environmental goals with minimal
economic costs, governmental intervention may be a necessary antidote to market
failures and unnecessary barriers. But even for those who would rely primarily on
markets and minimize the role of government, the technological perspective is
considered optimistic, dynamic, and oriented toward the future.
Economic Lens
Background. Viewing environmental issues through an economic lens
focuses attention on markets, price signals, and market imperfections. In this view,
the recognition of environmental problems should lead to adjustments in market
signals, changing producers’ inputs and handling of wastes, as well as the
composition and level of consumer demand, so as to maximize net social welfare.
Cleaning the environment entails costs, which can be weighed against benefits.
The government’s role in this scenario is to ensure the correct market signals.
To ensure correct signals, the government can:
! make consumers and producers aware of information on economic
costs and benefits;
! adjust prices through taxes or fees; and
! affect supply through tradeable permits for products (as with leaded
gasoline in the early 1980s) or for production-related emissions (as
with sulfur dioxide emissions), or through other market-oriented
devices.
Viewed through the economic lens, the marketplace, with the correct signals, can
operate to find the optimal solution.
Economic considerations have been an explicit or implicit part of environmental
policymaking since environmental quality became a federal issue in the 1960s. The
use of economic mechanisms to implement environmental goals was debated in the
1960s and early 1970s, but usually rejected on various grounds.31 Excluding
economic considerations from environmental protection proved difficult, however.
As laws began to be implemented, economic costs became increasingly
consequential, although generally masked under “practical” or “feasibility” concerns,
as achievement of some environmental standards within specified deadlines proved
impossible. Automobile standards were delayed; ozone compliance was postponed;
and other issues were litigated. Economic concepts began to re-emerge in the debate
31 See, for example, Steven Kelman, What Price Incentives: Economists and the
Environment (Boston: Auburn Publishing Co., 1981).

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CRS-12
over the environment with the need to extend deadlines and to provide more
flexibility to polluters to achieve mandated standards.32
The preferred economic approach to environmental problems traditionally is the
pollution tax. Economists observe that pollution imposes costs on society that are
not incorporated in the price of the goods or services responsible for the pollution;
these are called “external” costs. An ideal pollution tax “internalizes” these external
costs by making the beneficiary of the polluting activity pay for the socially borne
costs (polluter pays). As long as polluters find it cost-effective to reduce their
emissions to avoid paying the tax, they would add pollution controls until further
controls would have higher incremental costs than the tax. Likewise, innovators
would be encouraged to develop new technology that reduce emissions at a cost less
than the pollution tax. When the tax is set at the level at which the marginal costs of
more control would equal the marginal benefits society gains by future reductions,
society’s net welfare is maximized.
Despite the theoretical benefits of the pollution tax methodology, environmental
taxes have received limited practical use in the United States, for technical as well
as political reasons.33 Problems of implementation have loomed large, particularly
because of a lack of data, especially on benefits. Estimates of the benefits of a
specific environmental action can be uncertain and can vary greatly. There are no
existing U.S. models of an emissions tax, although five European countries34 have
carbon-based taxes. The closest U.S. example is a tax on chemicals that deplete
stratospheric ozone. To facilitate the phaseout of ozone-depleting chemicals
(required under the Montreal Protocol and subsequent amendments), the United
States imposed a tax on the production or importation of certain chemicals (including
chlorofluorocarbons, or CFCs) in 1990. This tax was designed to supplement the
allowance trading program that the EPA had designed to implement the international
agreements. Also, inventories of certain CFCs held on January 1 of each year are
subjected to a “floor stocks tax.”35
With the economists’ favor for pollution taxes not gaining policymakers’
adherence, attention shifted to other economic mechanisms to increase polluters’
flexibility in achieving environmental standards based upon regulation. Unlike a tax
that focuses on the price (demand) for a pollutant, these mechanisms focus on the
quantity (supply) of the pollutant permitted.
The tradeable allowance system for sulfur dioxide control in the acid rain
program (Title IV of the Clean Air Act Amendments of 1990) represented a
32 For background, see CRS Report 94-213, Market-Based Environmental Management:
Issues in Implementation, by John L. Moore et al.
33 Steven Kelman, What Price Incentives: Economists and the Environment (Boston:
Auburn Publishing Co., 1981).
34 Finland, the Netherlands, Sweden, Denmark, and Norway.
35 For CFC-11 and 12, the 2006 tax was $10.30 per pound, and the floor stocks tax was
$0.45 per pound. For more specifics on the current tax level, see IRS Form 6627,
Environmental Taxes.

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CRS-13
significant step in the evolution of economic mechanisms. Commonly called a “cap
and trade” system, the acid rain control program’s success has led to calls for use of
a similar system with other pollutants, including carbon dioxide.36
A cap and trade program like Title IV’s is based on two premises. First, a set
amount of a pollutant, such as SO , emitted by human activities can be assimilated
2
by the ecological system without undue harm. Thus the goal of the program is to put
a ceiling, or cap, on the total emissions of the pollutant rather than limit ambient
concentrations. Second, a market in pollution rights between polluters is the most
cost-effective means of achieving a given reduction. This market in pollution rights
(or allowances, each of which in the acid rain program is equal to one ton of SO ) is
2
designed so that owners of allowances can trade those allowances with other emitters
who need them or retain (bank) them for future use or sale. During the first eight
years of implementation of Title IV, compliance has been near 100%.
While market-based mechanisms such as cap and trade are sometimes regarded
as the private market’s alternative to a regulatory command-and-control program, the
interactions are more complex. The so-called “market for pollution rights” would not
exist if not for a governmental role in altering what the market would do in the
absence of governmental action. If governmental regulations did not restrict SO2
emissions, there would be no need for SO allowances. Government creates the
2
market and defines the boundaries of acceptable market responses. Under the SO2
trading program, facilities may buy allowances to meet necessary reductions instead
of installing equipment to control pollution.37 The choice depends on cost.
By allowing polluters to choose their lowest cost abatement actions,
implementing environmental goals through market mechanisms represents a general
elevation of economic “efficiency” as the sine qua non of decision-making.
Pragmatically achieving this efficiency presumes substantially complete knowledge
by producers and consumers of costs, abatement alternatives, and product
substitutions as well as substantial flexibility in achieving compliance. The market
approach simultaneously maintains the general principle of “polluter pays” as the
underlying ethical rationale for the distribution of costs among parties. Through the
market, the “polluter who pays” includes not only the producer, but also labor,
stockholders, and the consumer (who demands the product and who pays somewhat
more for the embedded costs to control pollution).
Those viewing environmental policy through the economic lens generally
presume that governmental interference, whether through subsidies or regulation,
should be minimal. In reality, the distribution of impacts through the market often
leads to calls for political interventions that compromise efficiency and the “polluter
pays” principle. The political process tends to weigh relevant differences between
various groups affected by an environmental mandate, and special treatment may be
36 See CRS Report RL33799, Climate Change: Design Approaches for a Greenhouse Gas
Reduction Program, by Larry Parker.
37 However, emissions may not cause ambient levels to exceed the National Ambient Air
Quality Standard for SO regardless of how many allowances the owners of emitting
2
facilities hold.

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CRS-14
deemed necessary to promote justice or fairness. For example, the sulfur dioxide
allowance system contains numerous “special” allocations of allowances to various
groups that argued for special consideration due to past, current, or future situations.
These special allocations represent subsidies to these groups that a strict “polluter-
pays” principle would not allow. Thus the “polluter-pays” principle is not a
distributional principle that policymakers will necessarily treat independently of other
concerns and criteria.
The economic lens reflects a traditional American belief in individual choice
and private markets — given the correct price signals, producers and consumers will
adjust their behavior accordingly. This adjustment will be done in the most cost-
efficient manner, and with a minimum of governmental involvement. Consumers’
desires are seen as responsive to price. The issue then is for the price to reflect the
costs of relevant externalities. With the right price, supply and demand will find the
level that maximizes social welfare.38 Policymakers using the economic lens see
consumers and producers adjusting their behaviors to the “new reality” of an
environmental problem by responding to the price signals that take into account a
particular environmental goal. But this approach creates clear winners and losers
in terms of who will profit and who will pay the tab. As a result, policymakers adjust
governmental intervention to achieve change at a pace and impact that are socially
and politically acceptable.
Application to Global Climate Change. The economic lens focuses
policymakers on market-based approaches to address global climate change; these
include marketable permit (allowance) programs and various taxes, fees, and rebates,
as well as research and development, education, and market-related information.
Current proposals for controlling carbon dioxide and other greenhouse gas emissions
center on either marketable permits programs (loosely based on the current sulfur
dioxide program) or on a carbon tax (the closest domestic analogy is the
chlorofluorocarbon tax although there are substantial differences between the two
schemes.).39 Meanwhile, the members of the European Union, in addressing their
obligations under the Kyoto Protocol, have established a CO trading program that
2
covers about half their total CO emissions.40 In addition, Finland, the Netherlands,
2
Sweden, Denmark, and Norway have imposed carbon taxes.
Debate in the United States about implementing carbon reductions has focused
on tradeable permits — though occasionally a voice for carbon taxes is heard.41 A
38 As American Enterprise Institute scholar Kenneth P. Green says, “The right thing to do
is to ... tax the environmental harms that energy demonstrably creates and let the market sort
it out.” “The Best Policy on Subsidies Is to Simply Ditch Them” AEI Short Publications,
posted Jan. 29, 2007 at [http://www.aei.org/publications/pubID.25532/pub_detail.asp] .
39 See CRS Report RL33799, Climate Change: Design Approaches for a Greenhouse Gas
Reduction Program, by Larry Parker.
40 See CRS Report RL33581, Climate Change: The European Union’s Emissions Trading
System (EU-ETS), by Larry Parker.
41 Anne Applebaum, “Global Warming’s Simple Remedy,” The Washington Post (February
(continued...)

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key element of the Clinton Administration’s negotiating position at Kyoto was the
inclusion of domestic and international emissions trading systems and international
joint implementation programs to implement any emission reduction requirements.
While rejecting the Kyoto Protocol, the George W. Bush Administration’s Climate
Change Initiative acknowledges the potential use for trading programs to address
climate change. The Initiative directs the Secretary of Energy to recommend ways
to ensure that entities that register reductions under current voluntary initiatives are
not penalized under a future climate policy, and to give transferable credits to
companies that achieve real reductions. In addition, the Administration states: “If,
in 2012, we find that we are not on track toward meeting our goal, and sound science
justifies further policy action, the United States will respond with additional
measures that may include a broad, market-based program....”42
Numerous bills have been introduced in Congress to mandate substantial
reductions in CO emissions implemented through a nationwide tradeable permit
2
program, and twice the Senate has voted on proposals. In the 108th Congress, S. 139,
which would have imposed a mandatory cap-and-trade greenhouse gas reduction
program, failed in 2003 on a 43-55 vote. In 2005, a similar initiative was considered
as an amendment during the Senate debate on the Energy Policy Act of 2005 and
defeated on a 38-60 vote. These proposals would have capped U.S. greenhouse gas
emissions, with the cap being implemented through a tradeable permit program to
encourage efficient reductions. Although these initiatives failed, 13 Senators
introduced S.Amdt. 866 during the debate on the Energy Policy Act of 2005; it stated
that it is the Sense of the Senate that the Congress should enact a comprehensive and
effective national program of mandatory, market-based limits and incentives on
greenhouse gases that slow, stop, and reverse the growth of such emissions. The
resolution passed by voice vote after a motion to table it failed on a 43-54 vote.
The generally acclaimed success of the sulfur dioxide program notwithstanding,
it may not translate easily to a marketable permit program for carbon dioxide.
Fundamental differences exist: for example, the acid rain program involves over
2,000 new and existing electric generating facilities that contribute two-thirds of the
country’s sulfur dioxide and one-third of its nitrogen oxide emissions (the two
primary precursors of acid rain). This concentration of sources makes the logistics
of allowance trading administratively manageable and enforceable. However, carbon
dioxide emission sources are not so concentrated. Although over 95% of the CO2
generated from human activities comes from fossil fuel combustion, only about 40%
comes from generating electricity. Transportation accounts for about 33%, direct
residential and commercial use for about 12%, and direct industrial use for about
15%. Small dispersed sources in transportation, residential/commercial, and the
industrial sectors are far more important in controlling CO emissions than they are
2
in controlling SO emissions. This would create significant problems in
2
administering and enforcing a tradeable permit program that attempts to be
41 (...continued)
6, 2007), p. A17.
42 White House, Global Climate Change Policy Book, February 2002. Available at
[http://www.whitehouse.gov/news/releases/2002/02/climatechange.html].

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CRS-16
comprehensive or equitable.43 These concerns multiply as the global nature of the
climate change issue is considered, along with other potential greenhouse gases, such
as methane and nitrous oxide.44
In the view of most economists, a carbon tax would be the most efficient
approach to controlling CO emissions.45 The approach is generally conceived as a
2
levy on natural gas, petroleum, and coal according to their carbon content, in the
approximate ratio of 0.6 to 0.8 to 1.0, respectively. With the millions of emitters
involved in controlling CO , the advantages of a tax are self-evident. Imposed on an
2
input basis, administrative burdens such as stack monitoring to determine compliance
would be reduced. Also, a carbon tax would have the broad effect across the
economy that some feel is necessary to achieve long-term reductions in emissions.
In other ways, a tax system merely changes the forum, rather than the substance
of the policy debate. Because paying an emissions tax becomes an alternative to
controlling emissions, the debate over the amount of reductions necessarily becomes
a debate over the level of tax imposed. Those wanting large reductions quickly
would want a high tax imposed over a short period of time. Those more concerned
with the potential economic burden of a carbon tax would want a low tax imposed
at a later time with possible exceptions for various events. Taxing emissions
basically would remain an implementation strategy; policy determinations such as tax
levels would require political/regulatory decisions. Also, a tax would raise revenues;
the disposition of these revenues would significantly affect the economic and
distributional impacts of the tax.
The difficulties in crafting a carbon tax or a multi-national trading program
should not be underestimated. With the 1997 Kyoto Protocol now in force, countries
that ratified the protocol are developing appropriate implementation strategies to
begin reducing their emissions of greenhouse gases. In particular, the European
Union (EU) decided to establish an emission trading scheme as a cornerstone of its
efforts to meet its obligation under the Kyoto Protocol. In deciding on this scheme,
the European Commission (EC) adopted an initial “learning-by doing” trial period
(2005-2007) to prepare the EU for Kyoto Protocol’s emissions limitations that begin
in 2008. The results from 2005-2006 suggest a rocky start for the program as over-
allocation of allowances, thin trading volumes, and other issues have resulted in a
very volatile market. From a high of about 30 euro per allowance in 2005, the
allowance price has dropped to less than 2 euro in early 2007. Such an inconsistent
43 On distributional effects of carbon trading, see Congressional Budget Office, Who Gains
and Who Pays Under Carbon-Allowance Trading? The Distributional Effects of Alternative
Policy Designs, June 2000.
44 For a discussion of the emerging international market for greenhouse gas credits, see
Richard Rosenzweig, Matthew Varilek, and Josef Janssen, The Emerging International
Greenhouse Gas Market, Pew Center on Global Climate Change, March 2002.
45 “It is an open and shut case that the most economic way to constrain carbon dioxide
(CO ) emissions is a flat-rate tax based on the carbon content of fuels — across the board,
2
no exceptions.” David Cope, “Environment, Economics and Science,” UK CEED Bulletin,
No. 53 (Spring 1998), 18.

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CRS-17
price signal from the trading program make the long-term effect of the ETS
uncertain.46
The choice between a tradeable permit approach and a tax approach depends in
part on one’s sensitivity to the uncertainty in the benefits of reductions in greenhouse
gases versus the uncertainty in the costs of the program. Those confident of the
benefits to be received from reducing greenhouse gases tend to focus on the quantity
of pollutants emitted and to argue for a specific, mandated emission level. For
example, the Kyoto agreement mandates a specific allowable emission level based
on a historical baseline (1990/1995, depending on the gas) for a specific compliance
period (2008-2012). While a ceiling is placed on emissions, no ceiling is placed on
control costs. Implementing such a reduction program through a market-based
scheme, such as a tradeable permit program, would probably assure that the costs
would be dealt with efficiently through the marketplace; however, those costs are not
capped. This is the approach used under the current SO control program.
2
Preliminary results indicate that control costs under the SO program are considerably
2
less than they would have been under an alternative “command and control” scheme.
However, there is no lid on the costs, which may rise in the future as growth in
electricity generation pushes against the cap on emissions.
Alternatively, a tax in effect places a ceiling on control costs, although the actual
reductions achieved are subject to some uncertainty. For example, if a carbon tax of
$100 a ton were levied, no polluter would pay more than $100 a ton to reduce carbon
emissions. Thus, under worst-case conditions, the program costs would be $100 a
ton. However, the actual reductions that such a tax might achieve would have to be
estimated, based on economic simulations or actual monitoring. Reductions would
not be guaranteed as any polluter could choose to pay the tax rather than to reduce
emissions. Reductions could also vary over time as new technology or other events
raise or lower the cost of reducing emissions.
A carbon tax or tradeable permit program would affect economic behavior in
at least three ways: (1) effectively reduce real income through higher prices and
therefore reduce overall consumption of goods (particularly in the short-term); (2)
encourage manufacturers and consumers to substitute less carbon-intensive (or
carbon free) energy sources for current carbon-intensive (i.e., fossil fuel) energy
sources; and (3) encourage both research and development of innovative, less carbon
intensive or more energy efficient technologies and their penetration into the
marketplace. The ability and efficiency of the economy in making these adjustments
over a specified period of time would largely determine the impact of a market-
induced rise in the costs of energy generated from fossil fuels either through a carbon
tax or a marketable permit program.
Depending on the reduction achieved and the model employed, annual gross
domestic product (GDP) losses resulting from carbon control are estimated to range
from less than 1% to more than 4%, with most falling into a range of 1% to 3%. If
a carbon tax were chosen, that tax would generate revenues — revenues sufficiently
46 For more information, see CRS Report RL33581, Climate Change: The European Union’s
Emissions Trading System (EU-ETS), by Larry Parker.

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CRS-18
large to affect aggregate consumer demand. It is the contractionary pressure of these
tax revenues that the Congressional Budget Office (CBO) cites as the major reason
for a projected loss of 2% in U.S. GDP from a $100 per ton carbon tax phased in over
10 years.47 The disposition of those tax revenues would greatly affect the impact of
the carbon tax on the economy. Thus the impact of a carbon tax on the economy
would depend on a combination of policies beyond just the level of the tax.
The tax level necessary to achieve a given reduction is also subject to a wide
range of estimates. The Stanford Energy Modeling Forum compared 13 models
under a series of control scenarios with common assumptions (where possible),
including one calling for carbon emissions stabilization at 1990 levels by the year
2000.48 About half of the models studied estimated the carbon tax necessary to meet
the stabilization target in the year 2000 to be about $30 per ton or less, while the
other half estimated the necessary carbon tax to be about $100 or more. Further
studies by the Stanford Energy Modeling Forum on the cost to comply with the
Kyoto Protocol, and on the global compliance cost of various stabilization scenarios,
resulted in a similarly wide range of estimated tax levels.49
Because the problem of greenhouse gas emissions is seen in terms of
internalizing a currently external cost, the economic lens implies that the marketplace
is the most efficient means of controlling undesirable pollutants. The private sector
can solve the problem if given sufficient incentive with minimal governmental
interference. The Government’s role primarily consists of providing a market-based
signal to private industry about the external cost (e.g., emission taxes, tradeable
permits, etc.). In reality, the Government’s role is more involved. For taxes, this
includes determining the tax level, any phasing-in period, escalation, and recycling
of revenues received. For permits, this includes the total numbers of permits
allowed, initial allocation formulas, any phasing in period, penalties, transaction
procedures, and tax liability. While an economic approach would supplement the
policy process in implementing a greenhouse gas reduction program, it would not be
a substitute for basic policy decisions and oversight.
A limited or supporting governmental role is consistent with the overall
perspective of the economic lens: private initiative, economic cost-effectiveness,
concern about impact of environmental policy on economic policy, cost aversion, and
reliance on market forces.
47 Congressional Budget Office, Carbon Charges as a Response to Global Warming: The
Effects of Taxing Fossil Fuels (August 1990), pp. 35-37.
48 Energy Information Administration, Energy Modeling Forum Study 12 — Global Climate
Change: Energy Sector Impact of Greenhouse Gas Control Strategies. Response to request
by the House Committee on Energy and Commerce (May 4, 1992).
49 On Kyoto Protocol compliance costs, see John Weyant and Jennifer Hill, “Introduction
and Overview,” The Energy Journal, (Special Issue, 1999), pp. vii-xliv; on global
compliance costs of various stabilization scenarios, see John P. Weyant, Francisco C. de la
Chesnaye, and Geoff J. Blanford, “Overview of EMF-21: Multigas Mitigation and Climate
Policy,” The Energy Journal (Special Issue, 2006), pp. 1-32.

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Ecological Approach
Background. The development of environmental protection as a national
policy concern reflects three factors: (1) the development of an environmental
consciousness among the electorate, (2) a change in the climate of decision-making
among individuals, businesses, and government at all levels, (3) the availability of
opportunities to make concrete decisions based on environmental grounds (either in
addition to or in opposition to economic criteria).
The underlying basis of an environmental consciousness is an understanding of
the interconnectedness of the planet’s biological processes, and a recognition that
changes caused by humans may have ecological effects beyond those intended or
foreseen. From this perspective, it is in humanity’s self-interest (as well as in the
interests of non-human life) to protect the basic biological processes that are the
foundation of all life; humans can protect those processes by being conscious of
humanity’s environmental impact and by avoiding or mitigating that impact to the
greatest extent necessary (accepting that some impact is unavoidable, and that
ecological science has a crucial role in discovering the effects of human activities).
A seminal characterization of the ecological perspective is A Sand County
Almanac, by Aldo Leopold.50 He suggested that humankind has developed two
ethical dimensions — the first dealing with the relation between individuals and the
second with the relation between the individual and society. But, said Leopold:
There is as yet no ethic dealing with man’s relation to land and to the animals
and plants which grow upon it.... The extension of ethics to this third element in
human environment is, if I read the evidence correctly, an evolutionary
possibility and an ecological necessity.51
Describing the need for an “ecological conscience,” Leopold concluded that the
environmental problem “is one of attitudes and implements”; the development of a
“land ethic” requires “an internal change in our intellectual emphasis, loyalties,
affections, and convictions.”52
The challenge of the ecological approach was given global scope by the
“Brundtland Report” of the World Commission on Environment and Development.
Articulating the goal of “sustainable development,” its forward described the
challenge this way:
50 Aldo Leopold, A Sand County Almanac, with Essays on Conservation from Round River
(New York: Ballantine Books, 1970), pp. 237-264.
51 Ibid., p. 239.
52 Ibid., pp. 263, 246. Some, viewing global climate change through the ecological lens, see
in the long-term risks an indictment of the lifestyle and economic structure of Western
society — a viewpoint profoundly disturbing to others who do not look through the same
lens. As noted by Leopold, an environmental ethic imposes new obligations, calls for
sacrifice, and changes existing values.

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If we do not succeed in putting our message of urgency through to today’s
parents and decision makers, we risk undermining our children’s fundamental
right to a healthy, life-enhancing environment. Unless we are able to translate
our words into a language that can reach the minds and hearts of people young
and old, we shall not be able to undertake the extensive social changes needed
to correct the course of development.
.... We call for a common endeavor and for new norms of behavior at all levels
and in the interests of all. The changes in attitudes, in social values, and in
aspirations that the report urges will depend on vast campaigns of education,
debate, and public participation.53
The idea of “sustainable development” suggests future generations should enjoy
the same opportunities for meaningful and fulfilling lives as the current generation.
A sustainable society has been defined as “one that satisfies its needs without
jeopardizing the prospects of future generations.”54 The concept thus serves as an
umbrella to encourage development of renewable resources and conservation of non-
renewable resources.55
The emergence of the ecological perspective (or the “land ethic” or “sustainable
development”) is manifest in new values and practices of individuals, businesses, and
Government.
Within the federal government, the National Environmental Policy Act of 1969
represented a watershed in establishing the principle that major federal decisions
should publically disclose and take into account environmental impacts. Originally
resisted by many agencies, the idea of assessing the environmental consequences of
decisions through “Environmental Impact Statements” has now become routine.
Also, over the past two decades, the federal government has taken steps to foster
public awareness of environmental values through support for environmental
education. In addition, the federal government has used procurement policies to
support environmental goals; for example, by requiring purchases of paper of
specified recycling content and authorizing payment of a premium for it, and has
revised statutes to make federal facilities subject to these requirements.
The change in societal values resulting from an increased ecological
consciousness also affects the perspectives of corporate decision-makers. Despite the
often confrontational relationship between federal environmental policymakers and
industry, a consequence often attributable to the command-and-control regulatory
approach to environmental policy, industry itself has increasingly recognized that
53 Our Common Future (New York: Oxford University Press, 1987), p. xiv.
54 Lester R. Brown, et al. State of the World, 1990 (New York: W.W. Norton & Company,
1990), p. 171.
55 See, for example, Richard B. Norgaard and Richard B. Howarth, “Climate Rights of
Future Generations, Economic Analysis, and the Policy Process,” in U.S. Congress, House,
Committee on Science, Space, and Technology, Technologies and Strategies for Addressing
Global Climate Change, Hearings, 17 July 1991 (Washington, D.C.: U.S. Govt. Print. Off.,
1992), pp. 160-173.

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community environmental values are part of the social milieu in which industrial
production occurs.
A 1994 article in the chemical industry publication Chemical Week reviewed the
industry’s perceptions of pollution control. It noted that, in the early 1970s, most
corporations viewed environmental management as a “threat” and that pollution
control expenditures were “nonrecoverable investments.”56 The article observed that,
in 1970, “economist Milton Friedman described the actions of any company making
pollution control expenditures beyond that ‘required by law in order to contribute to
the social objective of improving the environment’ as ‘pure and unadulterated
socialism’.” In contrast, the article said that major corporations currently are
espousing the benefits of proactive environmental management, stewardship, and
environmental leadership. The chemical industry, which was suffering from poor
public perceptions, particularly after the Bhopal incident, was at the forefront of this
shift, as indicated by remarks of Robert Luft, Senior Vice President of Du Pont
Chemicals: “Our continued existence requires that we excel in safety and
environmental performance.... We must shift our mindset from ‘meeting regulations’
to ‘meeting public expectations’.”57
This new attitude, or climate, of decision-making is providing many businesses
and individuals with new alternatives and opportunities to choose environmentally
preferred options either in concert with more traditionally based economic criteria or
in opposition to such “self-interest”-based criteria. For example, the chemical
industry today sponsors an international “Responsible Care” campaign58; and
prodded by environmental groups and EPA, the American Chemistry Council (ACC)
has committed the industry to testing of high-use chemicals.59 An independent but
related ACC initiative is the Green Chemistry Institute, a nonprofit organization with
the mission of promoting pollution prevention using “economically sustainable clean
production technologies.”60 In addition, EPA and the American Chemical Society
jointly sponsor annual “Green Chemistry Challenge Awards” to recognize pollution
prevention through innovative chemistry; the first Green Chemistry Award was
presented in 1996.
Individuals, as consumers and citizens, are also exercising options to express an
environmental consciousness that extends beyond immediate economic self-interest.
Consumers’ responses to such environmental problems as solid waste disposal
indicate that individual behavior and community programs can and will reflect
environmental values. For example, recycling programs have increased in recent
years, despite questionable economics and the significant consumer inconveniences
56 “34 Years of Environmental Strategy,” Chemical Week (August 24, 1994), 27.
57 Robert v.d. Luft, “Protecting the Environment: It’s Good Business,” Remarks, at the
National Petroleum Refiners Association International Conference, San Antonio, Texas (26
March 1991), p. 9.
58 See [http://www.responsiblecare.org/] and, domestically, [http://www.americanchemistry.
com/s_acc/index.asp]
59 See [http://www.uslri.org/].
60 See [http://chemistry.org/greenchemistryinstitute].

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CRS-22
involved. Such a trend suggests the power of aesthetics and the perceived intrinsic
value of the environment as a force which influences people’s preferences and
priorities.
The ecological lens magnifies elements that are psychological, philosophical,
and theological.61 A policy decision to address a pollution problem generally
involves a sophisticated and sometimes lengthy educational process of which
economics and technological availability are only components. In this view,
environmental education, Smokey the Bear, and environmental interest groups from
the Audubon Society to Greenpeace to Population Connection represent efforts to
inculcate the sense of moral obligation toward the environment — to acculturate
people to the importance of the environment as essential to long-term human health
and welfare. Such efforts can promote a climate of opinion in which environmentally
responsible decisions are socially endorsed and environmentally irresponsible
decisions are stigmatized as not socially acceptable. Pollution protection gets on the
national agenda not on the basis of affordability or whether control technology exists,
but because an environmental problem is recognized as a threat to human health or
welfare. The ecological approach views the problem of environmental policy
implementation to be the moral education of individuals and institutions to the
dimensions of the ecological crisis, changing the climate in which decisions are
made, and providing opportunities for individuals and institutions to make decisions
based on ecological concerns, rather than having those choices limited to
alternatives dictated solely by economic criteria.
Application to Global Climate Change. In some ways, global climate
change is the quintessential issue for an ecological lens, as it so clearly involves far-
reaching dimensions including the standing of future generations, non-human life,
and distributional justice around the globe. The ecological lens provides a decision
criterion in the face of uncertainty or of competing preferences. Aldo Leopold
observed that the land ethic “may be regarded as a mode of guidance for meeting
ecological situations so new or intricate, or involving such deferred reactions, that the
path of social expediency is not discernible to the average individual.”62 No situation
is better described as “so new and intricate” or as having “such deferred reactions”
than global climate change.
An ecological perspective on global climate change focuses attention on an
enlightened public to implement stewardship through a changed value system.
Numerous international and domestic entities are supporting activities to foster
governmental, corporate, and public awareness of the global climate change issue and
to encourage remedial actions. (Other entities provide “neutral” information and
analysis on the issue, and still others actively lobby against the viewpoint that action
is justified at this time.) These organizations support activities that translate into
concrete actions through a variety of mechanisms, including voluntary programs for
businesses and alternative “green” options that allow for individual consumers to
make ecologically responsible decisions even when they cost more than do traditional
choices.
61 Leopold noted that Ezekiel and Isaiah decried the despoliation of the land.
62 Leopold, p. 239.

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CRS-23
The current umbrella for activities to foster action is the U.N. Framework
Convention on Global Climate Change, under which a range of activities, from
research and development to education, are sponsored. Manifesting the ecological
perspective, the Framework Convention defines the signatories’ objective to be the
protection of ecosystems from “dangerous anthropogenic interference with the
climate system ... to allow ecosystems to adapt naturally to climate change, to ensure
that food production is not threatened and to enable economic development to
proceed in a sustainable manner.”63 Economic and human concerns are seen as
interdependent with ecological processes. The potential policy agenda could include
virtually all human endeavors and relationships, from industrial policy to North-
South equity, from population policy to energy policy, from domestic concerns to the
restructuring of international institutions.
From the ecological perspective, achieving such a broad policy agenda would
require an active federal governmental role that involves educating the citizenry
about the need to act on the risk of global climate change, providing the public with
a role model in terms of government’s own decisions and priorities, and developing
opportunities for individuals to make ecologically responsible decisions even if those
decisions are not economic in a traditional sense. At this stage of the climate change
debate, the federal role has included four kinds of activities that reflect environmental
stewardship.
! First, making decisions that take into account potential consequences
for global climate change and taking actions that support and
promote environmentally “friendly” products or processes (for
example, through procurement policies or through product labeling).
! Second, internationally exploring the possibilities of achieving
consensus on further greenhouse gas emissions reductions and on
inter-related economic and human issues.
! Third, supporting education of the public on environmental concerns
generally and about global climate change specifically, and fostering
the inculcation of environmental values in educational programs.
! Fourth, fostering mechanisms that permit the public to express their
environmental values in everyday decision-making.
Similar activities are being promoted through various corporate and nonprofit
initiatives, as well. For example, a 1998 corporate initiative under the auspices of
The Pew Center On Global Climate Change64 is designed to bring “a new cooperative
63 United Nations Framework Convention on Climate Change, article 2. The United States
is a Party to the Framework Convention on Climate Change.
64 The efforts are spearheaded by the Center’s Business Environmental Leadership Council
whose members include American Electric Power, Boeing, Company, BP America, Enron
Corp, Intercontinental Energy Corporation, Lockheed, Maytag, The Sun Company, 3M,
Toyota, United Technologies, U.S. Generating, Whirlpool Corporation. The quotations in
(continued...)

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CRS-24
approach and critical scientific, economic and technological expertise to the global
debate on climate change.” Accepting “the views of scientists that enough is known
about the science and environmental impacts of climate change for us to take actions
to address its consequences,” the Center believes “businesses can and should take
concrete steps now in the U.S. and abroad to assess their opportunities for emission
reductions, establish and meet their emission reduction objectives, and invest in new,
more efficient products, practices and technologies.” Besides this commitment to
stewardship, “major companies and other organizations are working together through
the Center to educate the public on the risks, challenges and solutions to climate
change”; undertaking “studies and policy analyses that will add new facts and
perspectives to the climate change debate in key areas such as economic and
environmental impacts, and equity issues”; and engaging in an international effort
designed to increase the global understanding of market mechanisms, and to work
with developing countries to assess emission reduction opportunities.”
The ecological perspective emerges from individual actions both in terms of
support for educational endeavors — as in support for environmental interest groups
— as well as through market choices based on ecological impacts rather than on pure
economic costs. Indeed, these actions can go against prevailing economic or
technological trends. For example, people may choose to pay more for a product or
a service because it is perceived as being more “green” or “climate friendly” than
alternatives based on traditional economic or technological considerations. In a
sense, customer preferences can outrun the marketplace by creating a demand for a
product that producers did not anticipate. In such cases, economic and technological
mechanisms follow the ecological imperative, rather than defining limits to it.
Many actions to reduce emissions of greenhouse gases can serve multiple social
ends — such as energy conservation and pollution prevention that are thought to
improve the economic efficiency with which human needs are met. Governments
and corporations have taken a lead in fostering energy conservation and efficiency
in use, particularly in developed countries. In the U.S., EPA and DOE sponsor a
range of energy efficiency programs under the rubric, “Energy Star,” to promote
energy-efficient lighting, buildings, and office equipment.65 DOE funds research and
demonstration, pursuing energy efficiency in transportation, industry, utility, and
buildings sectors.66 There is also an Alliance to Save Energy, a nonprofit coalition
of prominent business, government, environmental, and consumer leaders who
promote the efficient and clean use of energy worldwide, arguing benefits for the
environment, the economy, and national security.67
64 (...continued)
this paragraph are from the Pew Center on Global Climate Change’s website, at
[http://www.pewclimate.org/home.html].
65 See [http://www.energystar.gov/].
66 See CRS Report RL33599, Energy Efficiency Policy: Budget, Electricity Conservation,
and Fuel Conservation Issues, by Fred Sissine.
67 For more information, see [http://www.ase.org].

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CRS-25
These EPA and DOE activities fall within the Administration’s Global Climate
Change Initiative. While technological in thrust, a key element of many of these
programs involves education of prospective consumers to persuade them not only of
potential cost savings but also of social benefits to be gained. Thus technology (and
markets) can be the tool for meeting the “moral imperative” associated with by the
ecological perspective.68 Internationally, the Administration’s Asia-Pacific
Partnership on Clean Development and Climate has parallels. It involves
encouraging the partners, including the developing China, India, and South Korea,
to adopt more sustainable environmental policies, especially in using energy sources
and technologies that constrain greenhouse gas emissions.
Similarly, government and corporate initiatives for pollution prevention,
through, for example, source reduction and product stewardship, foster systematic
changes that have the potential to reduce global climate change risks. EPA estimates
that its WasteWise program — a voluntary partnership between EPA and businesses
to prevent waste, recycle, and buy and manufacture products with recycled materials.
EPA has estimated that, through waste reduction and recycling activities in 2004,
WasteWise partners reduced GHG emissions by more than 8 million metric tons of
carbon equivalent.69
Thus, from the ecological perspective, with a public more aware of the problem
of global climate change and with the availability of relevant technological and/or
economic alternatives, the implementation of the broader agenda through appropriate
measures becomes possible: making available options that permit people to exercise
their moral obligation.
The Three Lenses and Policy Approaches
Each of the three lenses implies fundamentally different ways of assessing
policy actions to address global climate change. Crucial variations emerge in
perspectives on cost analysis, scientific uncertainty, and the role of government.
Cost Analysis as Viewed Through the Lenses
The technological lens focuses attention on the outcome of the innovation;
actions are justified if they resolve the pollution problem, and costs and benefits
should be weighed in terms of the outcome, not in terms of the transitional costs. In
contrast, those viewing the issue through the economic lens tend to focus on costs
and benefits as the critical metric for evaluating policies; actions are justified when
the benefits outweigh the costs, but not otherwise. The ecological perspective
basically suggests that policy choices can be based on a recognition of “rights” rather
68 However, some “deep ecologists” reject technological fixes and the use of market
mechanisms on the grounds that they merely further a nonsustainable system that needs to
be replaced.
69 EPA, WasteWise Annual Report 2005, p. 4.

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CRS-26
than costs and benefits; the principles of protecting life and of preserving the
ecosystem for future generations govern choices.
These differing viewpoints have implications for the timing and focus of
invested resources. Looking through the technological lens, a policymaker would
focus on investing resources directly in technical options. Some investment in
understanding the problem may be necessary to delineate technical options, but new
technologies may make extensive research in understanding the problem moot (as
when a process change eliminates use of a chemical of concern). Looking through
the economic lens, a policymaker would typically first invest resources in
understanding the problem and the costs and benefits of alternatives. That
assessment would reveal whether society would be better off adopting policies and
committing resources to action (e.g., to reduce carbon dioxide emissions). Looking
through the ecological lens, a policymaker who perceives a risk to health and/or
ecological systems would tend to promote immediate action. Investments in
understanding the problem and the costs and benefits would be undertaken only to
the extent appropriate to ensure cost-effectiveness of those actions. Because the
ecological lens portrays benefits largely in non-economic terms (sustainability,
equity), efforts to quantify and monetize those benefits may be viewed as
inappropriate — even immoral. Instead, people are provided with alternatives to act
on the problem, allowing them to choose a “responsible” option, even if it costs more
than a traditionally defined “economic” option.
Technological Lens. Those using the technological lens see it as a “far-
sighted,” economically justifiable approach to global climate change. Technology
is seen as the impetus for improved efficiency in the economy, concomitant with
improved environmental protection. Although the development of technology may
be encouraged for a variety of reasons, its commercialization is ultimately based on
cost-effectiveness. In terms of the substance of the environmental issue, the user of
the technological lens is typically agnostic or indifferent. The current economic
system is viewed as inefficient since it does not consider decisions on a “life-cycle”
basis. When considered on this broader perspective, reductions in carbon emissions
may be possible at no net costs to the economy — even at net savings.
Under the technological lens, the parameters of cost analysis change. Concepts
like “life-cycle” costs are pivotal in making the cost-effectiveness case for new
technology. Existing barriers (institutional or financial) to the rapid and widespread
commercialization of new technologies are seen as artificial constraints to be
overcome by government and individuals. The focus of analysis is on cost-
effectiveness of solutions, not so much on the benefits of the policy.
Economic Lens. The view through the economic lens fits the global climate
change issue within the boundary of market economics. The motivations of people
in reducing pollution is unimportant; the critical assumption is that people will act
in their own self-interest as dictated by price signals. The global climate change
issue becomes another consideration in setting prices — an externality that needs to
be internalized. If that price increment does not result in significant reductions, it is
because none is economically justified.

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CRS-27
Under the economic lens, the potential impacts of controlling greenhouse gases
on the economy versus expected benefits is a central variable in determining the
degree and time frame of reductions. Economic efficiency is the primary criterion
for assessing emission reduction programs. Any existing inefficiencies in the
economic system are assumed to reflect market reality and to be difficult to eliminate
(and eliminating them may be undesirable). Uncertainty about the potential benefits
is understood to be a factor in determining the stringency of any reduction program
and a potential reason for stretching out compliance. For this lens, cost-benefit
analysis is very important in assessing potential control programs. To the extent that
new technologies are projected to be cost-effective and to overcome any existing
market barriers or distortions, they are included in the cost-benefit analysis as viable
alternatives to existing control options.
Ecological lens. Those looking through the ecological lens are suspicious of
attempts to measure the economic effects of global climate change options. Most
efforts to measure economic effect involve comparing a carbon control scenario with
a “baseline” projection. The baseline generally is defined as the path the economy
would take assuming no changes attributable to adoption of climate change policies.
However, the baseline also tends to connote a path with no distortion; it is the path
from which distortions are measured. This conveys some normative legitimacy on
the baseline. If global climate change arguments are correct, then the current path is
not sustainable in the long run, and the baseline means little — a concern reflected
in proposals to incorporate “green accounting” into major economic indicators, such
as the Gross Domestic Product (GDP).70 Arguably, if an ecological perspective
returned the actual path to long-term sustainability, that scenario would represent the
more reasonable baseline. Discussions of economic “growth” and “distortions” are
relative to one’s perspective on the long-term potential for economic growth in a
world with increasing carbon dioxide concentrations.
Commonly, those looking through the ecological lens tend to dismiss economic
cost analysis, and particularly cost-benefit analysis, as being of limited usefulness in
the overall debate on global climate change, while acknowledging that they can have
utility in developing and choosing specific options. From the ecological perspective,
people should respond to the global climate change crisis because of its threat to
important values, such as the fate of future generations, not because action can be
justified on the basis of some narrowly defined cost-benefit analysis. Traditionally,
such analysis tends to place value only on those benefits that can be easily quantified,
while dismissing or ignoring many values that would be seen as governing through
the ecological lens. Viewed through the ecological lens, lives and such values as
intergenerational equity should not be quantified as a commodity.71 In this view,
70 Carol S. Caron, “Integrated Economic and Environmental Satellite Accounts,” Survey of
Current Business (April 1994), 33-49.
71 The ecological view was shown in the negative response to an economic analysis prepared
for the U.N.’s Intergovernmental Panel on Climate Change; “The Social Costs of Climate
Change: Greenhouse Damage and Benefits of Control” valued projected deaths of persons
in OECD nations at $1.5 million each while deaths of persons from China, India, and Africa
were valued at $150,000 each. From an ecological or human rights standpoint the
(continued...)

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CRS-28
treating the fate of future generations in terms of cost-benefit analysis and market
forces should be accorded the same social condemnation allotted those who
“prostitute” themselves by selling something for money that should not be sold.
What people need are alternatives to many of the choices that the marketplace
provides based on traditionally defined economic considerations.72
At the same time, a burgeoning area of study is ecological economics, and in
particular analyses to determine the economic benefits of ecosystems services, which
include climate regulation.73 Such studies may serve to defend environmental values
that are rarely accounted for in traditional economic analyses; they also provide
another example of the intertwining of the viewpoints.
The Role of Science as Viewed Through the Lenses
Although some would prefer that science dictate the timing and magnitude of
environmental policymaking, the nature of environmental science (and environmental
policymaking) is not such that definitive guidelines are likely in any significant issue.
Scientific knowledge represents a continuum of knowledge and uncertainty; policy
initiatives go forward when a sufficient majority of the society concludes that what
is known about the problem outweighs the uncertainties, or that the risks of delay
despite uncertainty are not acceptable. In some cases, increases in knowledge about
an environmental problem lead to more uncertainty, not less. In other cases,
increased knowledge about a problem leads to widening the issue, not narrowing it.
In the case of global climate change, at least three parameters help determine
how one is willing to balance the knowledge-uncertainty aspect of science. These
three parameters involve one’s perception of the potential risk of the problem, the
potential effectiveness of any reduction program, and the potential cost of the
solution. If one perceives the potential risk of the problem to be slight, the potential
effectiveness of any response to be questionable, and/or the potential cost to be high,
one will tend to require a high threshold with respect to scientific certainty before one
is willing to act. Conversely, if one perceives the potential risk to be high, the
potential effectiveness of any response to be reasonable, and the potential cost to be
low, one will likely be willing to act at a substantially lower threshold with respect
to scientific certainty.
Each of the three lenses contributes to differing views on these parameters and
on different courses of action. For example, being optimistic that energy efficiency
can be gained at low cost, the technology lens can accept a somewhat lower threshold
71 (...continued)
discrepancy surfaced ethical concerns. See John Adams, “Cost-Benefit Analysis: The
Problem, Not the Solution,” The Ecologist, 26 (January/February 1996), 3.
72 Peter G. Brown, “Toward an Economics of Stewardship: the Case of Climate,” Ecological
Economics 26 (1998), 11-21.
73 Robert Constanza et al., The Value of the World’s Ecosystem Services and Natural
Capital,” Ecological Economics 25 (1998), 3-15 [originally published in Nature, 387 (May
15, 1997), 253-260]; the issue contains a number of comments on the article as well.

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CRS-29
with respect to scientific certainty because the risk of high cost is discounted.
Likewise, the ecological lens’ concern about unintended consequences and the
protection of future generations lends itself to accepting a lower threshold with
respect to scientific certainty because of the precautionary need to protect the
biosphere regardless of cost. In contrast, the economic lens leads one toward a cost
aversion response, because the uncertainty may mean fewer benefits, a less effective
response, and potentially high cost. Those viewing the issue through this lens seek
more certainty before any significant investment is made in any solution.
In a study of the effects of personal beliefs and scientific uncertainty on climate
change policy,74 two researchers, Lave and Dowlatabadi, concluded that uncertainty
and the degree of optimism of the decisionmaker were both important, but less so
than whether the policymaker’s decision criterion hinged on minimizing expected
costs or on being as precautionary as possible. The former criterion, focused on
costs, essentially reflects the economic lens; the latter, focused on the “precautionary
principle,” essentially derives from the ecological lens. In a mix of scenarios, Lave
and Dowlatabadi found that those focused on minimizing expected costs would most
often support moderate abatement given existing uncertainties, while those focused
on being precautionary would more often support stringent abatement despite costs.
This interplay of uncertainty, information, and costs is summarized in Table 2.
The perspective on uncertainty can have tangible policy implications — as evidenced
by the ongoing debate between those who believe action to address global climate
change is justified and those who do not.
Federal Policy As Viewed through the Lenses
Faced with a fundamental problem, such as the potential for global climate
change, a policymaker who is looking through the technological lens and focusing
on technical fixes tends to take an activist view of the government’s role — to
support innovation and commercialization. In the same situation, a policymaker who
is looking through the economic lens and focusing on the costs and benefits of action
tends to view the government’s role as limited — to ensuring that any misfunctioning
of the market is corrected. And a policymaker who is looking through the ecological
lens and focusing on the need for action to solve the problem tends to see the
government actively playing crucial roles — to inform public understanding, to seek
public commitment, and to make available options for solving the problem.
These differing propensities on the role of government among the three
perspectives are summarized in Table 3. As described in this report, these
differences have consequences for one’s expectations for government action,
depending on the lens one views global climate change through. At the same time,
these differing expectations can have consequences for how one views the lenses
themselves: that is, persons with a predisposition for limited government are likely
to find the economic lens a more appropriate way to approach the issue than the other
74 Lester B. Lave and Hadi Dowlatabadi, “Climate Change: The Effects of Personal Beliefs
and Scientific Uncertainty,” Environmental Science and Technology, Vol. 27, no. 10 (1993),
pp. 1968, 1972.

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CRS-30
two lenses, whereas persons with a predisposition for activist government may be
more comfortable with the technology and/or ecological lenses.

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Table 2. Influence of the Lenses on Policy Parameters
Seriousness of
Risk in Developing
Approach
Costs
Problem
Mitigation Program
By itself, the lens is
Believes any reduction
Viewed from the bottom-
agnostic on the
program should be
up. Tends to see
problem. The focus of
designed to maximize
significant energy
the lens is on
opportunities for new
inefficiencies in the
developing new
technology. Risk lies in
current economic system
technology that can be
not developing technology
that currently (or
Technological
justified from multiple
by the appropriate time.
projected) available
criteria, including
Focus on research,
technologies can
economic,
development, and
eliminate at little or no
environmental and
demonstration; and on
overall cost to the overall
social perspectives.
removing barriers to
economy.
commercialization of new
technology.
Understands issue in
Believes that economic
Viewed from the top-
terms of quantifiable
costs should be examined
down. Tends to see a
cost-benefit analysis.
against economic benefits
gradual improvement in
Generally assumes the
in determining any
energy efficiency in the
status quo is the
specific reduction
economy, but significant
baseline from which
program. Risk lies in
costs (quantified in terms
Economic
costs and benefits are
imposing costs in excess
of GDP loss) resulting
measured.
of benefits. Any chosen
from global climate
Unquantifiable
reduction goal should be
change control programs.
uncertainty tends to be
implemented through
Typical loss estimates
ignored.
economic measures such
range from 1% to 2% of
as tradeable permits or
GDP.
emission taxes.
Understands issues in
Rather than economic
Views costs from an
terms of its potential
costs and benefits or
ethical perspective in
threat to basic values,
technological opportunity,
terms of the ecological
including ecological
effective protection of the
values that global
viability and the well-
planet’s ecosystems
climate change threatens.
being of future
should be the primary
Believes that values such
generations. Such
criterion in determining
as intergenerational
values reflect
the specifics of any
equity should not be
Ecological
ecological and ethical
reduction program. Focus
considered commodities
considerations;
of program should be on
to be bought and sold.
adherents see attempts
altering values and
Costs are defined
to convert them into
broadening consumer
broadly to include
commodities to be
choices.
aesthetic and
bought and sold as
environmental values
trivializing the issue.
that economic analysis
cannot readily quantify
and monetize.

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Table 3. Summary of Lenses
View of the
Role of
Approach
Guiding Principles
Problem
Government
Problem seen as
Technology can solve
Create market through
opportunity for new,
many of the problems
technological
more efficient
involved if so directed.
mandates.
technology. Country
seen as on the edge of
Governmental
Economic assistance
an energy transition.
sponsorship of and
through research and
Technological
intervention in
development
technological
sponsored by the
development can
Government.
accelerate the
commercialization of
appropriate
technology.
Problem seen in terms
The marketplace is the
Provide a market-
of internalizing a
most efficient means of
based signal to private
currently external cost.
controlling undesirable
industry about the
pollutants.
external cost (e.g.,
emission taxes,
Private sector can
tradeable permits,
Economic
solve problem given
etc.)
appropriate incentives
with minimal
governmental
interference; prices are
the best signal.
Problem seen in terms
If people have all the
Encourage a climate
of individual and
relevant information
in which
institutional behavior
about choices and have
environmentally
influenced by societal
the choice, they will
responsible decisions
values and education.
make the responsible
are more socially
choice. Prices cannot
acceptable and less
signal all essential
responsible decisions
values.
are stigmatized
Ecological
through public
People do not currently
education and
fully understand the
policies.
implications of their
behavior. The
Ensure availability of
economic system and
“green” options for
current technologies
consumers.
also restrict the
available choices.

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CRS-33
Conclusion: Balancing the Three Lenses to
Develop Policy
The technological, economic, and ecological “lenses” represent ways of viewing
responses to environmental problems. None is inherently more “right” or “correct”
than another; rather, they overlap and to varying degrees complement and conflict
with each other. Most people hold to each of the lenses in varying degrees and
combinations. For example, a person who is quite concerned about the potential of
global climate change from an ecological perspective, but concerned also about the
economic costs and the effectiveness of a reduction program, might see a “no regrets”
policy as most prudent under the circumstances. In contrast, an ecological
perspective combined with a strong technological perspective would see no reason
for not pushing forward with a strong reduction program without delay. A third
possibility could be a risk aversion perspective deriving from cost-benefit concerns
combined with a technological perspective, a combination that could lead one to a
strong research and development program combined with phased-in and selective
technological incentives based on potential cost-effectiveness. The combination of
possibilities are many, depending on the depth of commitment to any one perspective
or to any particular aspect (seriousness, effectiveness, costs) of the problem.
Table 3 summarizes the three lenses identified in this report. As indicated, they
reflect differing assumptions about the nature of the problem, the means to a solution,
and the governmental role in crafting that solution. The lenses are not mutually
exclusive, but rather reflect differing emphases on what is a very complex issue.
These different emphases can be seen when examining the lenses according to
different policymaking criteria; the governmental role differs substantially between
the lenses. In actual implementation, any global climate change response would
involve the government in multiple roles: promoting new technology, ensuring that
the marketplace functions properly, and educating the public.
Table 4 presents other policymaking criteria. Once again, one sees conflict and
complementarity across the different lenses. Eliminating non-market barriers can be
a key to technological development, a removal that those peering through the
economic lens would likely see as appropriate, although difficult. Similarly, those
employing the technological lens have no objection to the ecological orientation of
those using that lens, although they might question the need for such considerations
— especially since those looking through the ecological lens might demand such
thorough analysis of the implications of new technologies that its costs of
development could be greatly increased or its adoption might be delayed. However,
those viewing through the economic lens might object to the perspective given by the
ecological lens, if it were to give weight to values or concerns that could not be
justified through cost-benefit analysis (analysis to which those peering through the
ecological lens might object).

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Table 4. Review of Lenses Across Different Policymaking
Criteria
Approach
Economic Efficiency
Effectiveness
Implementation
Depends on the cost-
Tends to be very
Implementation is
effectiveness of the
effective at eliminating
straightforward
technologies developed.
emissions. However, the
once technology has
Technological
Subject to considerable
effectiveness sometimes
been developed.
uncertainty during the
comes at the expense of
research and
economic efficiency.
development stage.
Depends on the
Effectiveness depends on
Implementation is
functioning of the
the level of tax/number
straightforward
marketplace and how
of permits allowed and
from a
any economic distortions
the existence of any non-
governmental
are handled.
market barrier to
perspective,
Economic
compliance.
providing the
private sector with
the maximum
flexibility to
respond to the
market’s signals.
Depends on altered
Can be very effective
Implementation
values and broadened
over the long-term.
involves a
consumer choices —
However, the time-frame
combination of
economic efficiency is
involved is unclear.
public education
Ecological
redefined to include
and public policy to
ecological values (such
provide consumers
as future generations).
with the
opportunities to act
responsibly.
Elements of all three lenses can be seen in the policies promoted by the George
W. Bush Administration and in the actions of the Congress — although different
perspectives dominate. For the Administration, the technological (and to a lesser
degree, the ecological) lens appears very important to the long-term success of its
initiatives. The focus of Administration initiatives is on development and use of
technology to achieve reductions without significant economic pain. That the
Administration currently does not include a massive, mandatory program suggests
that the economic lens is heavily influencing the design of a climate change program.
Unlike the Clinton Administration, the George W. Bush views costs to be a major
obstacle to reducing greenhouse gases in the near term.
For the Congress, attention is focused on increasing certainty about the problem
and the costs of actions, consistent with the economic lens. While Congress did
ratify the 1992 Framework Convention on Climate Change and enacted several
global climate change provisions in the 1992 Energy Policy Act, its recent actions
have accentuated uncertainties and signaled a “go slow” approach. As noted earlier,
the Senate, on July 25, 1997, prior to Kyoto, agreed by a unanimous vote of 95-0 to

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S.Res. 98, which stated the Administration should sign no agreement that would
result in serious harm to the economy or that did not include developing countries
(along with developed countries) within its control regime. In addition, the
resolution stated that any agreement submitted to the Senate include a detailed and
comprehensive economic impact assessment of the treaty. The Congress’ current
actions on global climate change appear to focus on the issue from an economic
perspective, which highlights risks of high costs — a policy focus with which the
Administration appears to be in agreement.
Ultimately, it is the balance between all three perspectives that will shape policy
options and eventually determine the character and timing of any policy response to
the problem. Administration policy and congressional actions have suggested that the
risk of economic disruption is so high compared to the risk of global climate change
— given scientific uncertainties about warming, plus uncertainties about the costs
and benefits of actions to reduce greenhouse gases — that further policy development
and implementation are not yet justified. In S.Res. 98, the Senate expressed its
concern about the effectiveness of any actions the United States might take if large
developing nations such as China and India do not commit to specific control
requirements. But more recently, in S.Amdt. 866, the Senate expressed its sense that
the United States should take effective action to curtail greenhouse gas emissions,
with a market-based program designed to avoid significant harm to the economy; the
concern about developing nations was relegated to a hope that they could be
encouraged to also act.
The effort by various interests to convince the public that their perspective is
correct, and that those of others reflect either wishful thinking, misinformation, or
excuses, will likely continue. Such efforts will be affected by improvements in the
scientific understanding of global climate change, and of the domestic and
international implications for strategies for addressing it. However, the pivotal
decision-making point — whether that understanding warrants action or not — will
be mediated in large part by the lens through which policymakers view the new
knowledge.

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