An Inconvenient Solution? An Economic and Political Analysis of Global Warming Policy

Eleven years after the United States signed the Kyoto Protocol, climate change policy remains stalled in the United States. While 177 countries have ratified the Kyoto Protocol and several countries have enacted strong climate change policies, the United States has lagged behind primarily over concerns about the economic impact of such policies. As the world looks to the next Kyoto Protocol and as the United States transitions to new leadership, this paper aims to illuminate the policy debate by examining both the economics and politics of global warming policy. Beginning with an analysis of the theoretical climate change models that have informed the debate in the United States, this paper demonstrates that significant uncertainty exists in the models that underpin America’s current climate change position. Using data from the European Union, I empirically tested the theoretical climate change models. My findings indicated that the predictions of the models do not reflect the actual consequences of climate change policy. Indeed, climate change policy appears to have increased the economic output of European Union member states. However, a case study of the world leader in climate change legislation, Sweden, demonstrated that the actual mechanism for economic benefit is a multi-year process that initially involves economic downturn. Yet over the long-term, economies seem to adapt at a much faster pace than predicted by the theoretical models, enacting new technology and switching to renewable energy sources. By improving the efficiency of a country’s economy, climate change policy appears to increase economic growth in the long-term. Ultimately, this paper shows that by dispelling the myths of climate change policy from the current debate, the United States can join the 177 countries that are already addressing the issue of global warming. However, doing so will require more than just understanding the empirical evidence; a concerted political effort is also required to inform American voters and create the political capital necessary to enact policy