FSI's Program on Energy and Sustainable Development (PESD) is pleased to announce the selection of a new director, Frank Wolak, who is Holbrook Working Professor of Commodity Price Studies in the Department of Economics and FSI Senior Fellow.  Professor Wolak brings to the post a distinguished record of scholarship and deep policy experience in energy and environmental economics and regulation.

Wolak’s wide-ranging research contributions have examined energy systems both domestically and in emerging markets around the world.  He is the Chairman of the Market Surveillance Committee of the California Independent System Operator for the electricity supply industry in California and a Research Associate of the National Bureau of Economic Research (NBER), among other professional affiliations.

PESD founder David G. Victor, Professor of Law and FSI Senior Fellow, stepped down from the director position effective April 1, 2009. PESD Assistant Director Mark C. Thurber will take over as acting director until Wolak assumes the director position on September 1, 2009.

Victor will remain at Stanford as faculty through the end of the summer of 2009, when he will leave to become a full professor at the School of International Relations and Pacific Studies at U.C. San Diego, where he will build a research group working on the study of international regulation.
 
“FSI and Stanford are extremely grateful to David Victor for all that he has done to establish PESD and build it into the innovative and influential research program that it is today,” said FSI Director Coit D. Blacker, the Olivier Nomellini Professor in International Studies. “I know that the entire Stanford community joins me in extending our best wishes to David and in offering a hearty welcome to Frank.”

In a world facing profound transformations in the way energy is generated and used, PESD’s work on how political, economic, and institutional factors combine to shape energy market outcomes meets a critical global research need. For additional information on PESD research interests and platforms, please contact Acting Director Mark Thurber.

India has been famous for arguing that it (and the rest of the developing world) should incur no expense in controlling emissions that cause climate change. The West caused the problem and it should clean it up. That argument is increasingly untenable-both in the fundamental arithmetic of climate change, which is a problem that is impossible to solve without developing country participation, and in the political reality that important western partners will increasingly demand more of India and other developing countries. India's own public is also demanding more.

The Indian government has outlined a broad plan for what could be done, but the plan still lacks a strategy to inform which efforts offer the most leverage on warming emissions and which are most credible because they align with India's own interests. This paper offers a framework for that strategy. It suggests that a large number of options to control warming gases are in India's own self-interest, and with three case studies it suggests that leverage on emissions could amount to several hundred million tonnes of CO2 annually over the next decade and an even larger quantity by 2030. (For comparison, the Kyoto Protocol has caused worldwide emission reductions of, at most, a couple hundred million tonnes of CO2 per year.) We suggest in addition to identifying self-interest, which is the key concept in the burgeoning literature on "co-benefits" of climate change policy, that it is also important to examine where India and outsiders (e.g., technology providers and donors) have leverage.

One reason that strategies offered to date have remained abstract and difficult to implement is that they are not rooted in a clear understanding of where the Government of India is able to deliver on its promises (and where Indian firms have access to the needed technology and practices). Many ideas are interesting in theory but do not align with the administrative and technological capabilities of the Indian context. As the rest of the world contemplates how to engage with India on the task of controlling emissions it must craft deals that reflect India's interests, capabilities and leverage on emissions. These deals will not be simple to craft, but there are many precedents for such arrangements in other areas of international cooperation, such as in accession agreements to the WTO.

David G. Victor says a comprehensive, national-level climate change policy with bi-partisan support is necessary in the U.S. before engaging, seriously, with other nations. Although the Democrats control both the White House and Congess, previous landmark environmental legislation were authored under centrist Republican administrations. Furthermore, the Administration needs time to carefully construct a national policy that considers current, more stringent, policies at the state-level while balancing the economic crisis.

One effect of the new Obama administration's global charm is that America could be let out of the environmental doghouse. The Obama plan to restart the economy is stuffed full of green incentives, and the new president has earned global cheers for his promise to cut the gases that cause global warming. But hope and change are not easy to implement in Washington, and the first big disappointment is likely to come later this year when the world's governments gather in Copenhagen to replace the aging and ineffective Kyoto treaty.

In reality, the greenish tinge on nearly every economic recovery plan, even China's, show that this crisis offers green opportunity.

Pundits have been talking down the Copenhagen summit on the theory that the current financial crisis makes 2009 a tough time for governments to focus on costly and distant global goals like protecting the planet. In reality, the greenish tinge on nearly every economic recovery plan, even China's, show that this crisis offers green opportunity. The real reason Copenhagen will be a disappointment is that the new Obama administration can't lead until it first learns what it can actually implement at home. And delivering greenery in the American political system is harder than it looks-even when the same left-leaning party controls both the White House and Congress.

On environmental issues, America is barely a nation. Under a single flag it uneasily accommodates a host of states pushing greenery at wildly different speeds. In the 1970s and 1980s, this multispeed environmentalism propelled America to a leadership position. The key was truly bipartisan legislation, which allowed Washington to craft a coherent national approach. In fact, most of the major U.S. environmental laws did not arise solely from the environmental left but were forged by centrist Republican administrations working closely with centrist and left-leaning Democrats. Republican President Nixon created America's pathbreaking clean air and water regulations; Republican George H.W. Bush updated the air rules to tackle acid rain and other pernicious long-distance pollutants. In his more moderate second term, Ronald Reagan was America's champion of the ozone layer and helped spearhead a treaty-probably the world's most effective international environmental agreement-that earned bipartisan support at home and also pushed reluctant Europeans to regulate the pollutants.

Ever since the middle 1990s-about the time that the U.S. government was shut down due to a partisan budget dispute-such broad coalitions supporting greenery have been rare. In the vacuum of any serious federal policy, for nearly a decade the greener coastal states devised their own rules to cut warming gases. The United States as a whole let its green leadership lapse. (At the same time, the project to create a single European economy has shifted authority in environmental matters from individual member states into the hands of central policymakers in Brussels, where a coterie of hyperrich and very green countries have set the agenda. Europe, long a laggard on environmental issues, is now the world leader.)

The normal multispeed script was playing out on global warming as the Obama administration took power. Industry, worried about the specter of a patchwork of regulations, has lobbied for a coherent national strategy. But the Obama administration's first major policy on global-warming policy went in precisely the opposite direction: he reversed the Bush administration's decision that blocked California from adopting its own strict rules on automobile efficiency.

Today's challenge, which won't be solved by Copenhagen, is for Obama to stitch these many state environmental efforts together. That's no easy task. Global-warming regulation will probably have a larger impact on the nation's economy than any other environmental program in history, and any plan will have to allow enough room for some states to move quickly while also satisfying industry's well-founded need for harmony. Obama's Democratic Party controls both the White House and Congress, but that does not guarantee success. It will be difficult to craft a national policy that earns broad and bipartisan support while also taking the big bite out of the emissions that the rest of the world is hoping Obama will promise to the Copenhagen treaty. The difficulties aren't just in dragging along wary conservative Republicans. In fact, the most important skepticism about an aggressive national strategy has been from a coalition of centrist Democrats who fear the impact on jobs and economic growth.

One key to success will be crafting a deal with China and other developing countries to show that they, too, are making an effort. But serious efforts on that front are still in their infancy.

The big challenge for Copenhagen will be to find a way to allow negotiations to stretch beyond the unrealistic 2009 deadline while still keeping momentum. America's slowness in getting serious about global warming should be welcome because it is a contrast to its rushed behavior in negotiating the Kyoto treaty. At Kyoto, Bill Clinton's administration promised deep cuts in emissions without any plan for selling them at home, which is why the Bush administration could so easily abandon the treaty. Repeating that mistake would be a lot worse than waiting a bit for America to craft real leadership. If that's why Copenhagen falls short of the mark, then that's good news-real greenery, rather than fakery.