Tag: greenhouse gases

The Energy Paradigm Has Shifted

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I am very pleased to welcome guest-blogger Joe Tomain, who is Professor and Dean Emeritus at University of Cincinnati College of Law. Joe is also co-author, with regular guest-blogger Alexandra Klass and three other scholars, of a new energy law and policy text.

By Joe Tomain

On June 2 of this year, the Obama administration announced its Clean Power Plan (CPP).[1] This announcement is a game changer and it shifts the energy paradigm. Those phrases are often overused, however, in this instance they are fully apposite for two reasons.

First, the federal government has linked energy and the environment in ways in which they have not been linked in the past. This bringing together of energy and the environment is an essential move towards an effective energy transition for reasons that I will develop below. The second reason that this is a game changing move is because for too long the word in the street has been that the federal government will not take the lead in climate change efforts. The Clean Power Plan refutes that tightly held belief.

In one sense, the promulgation of the CPP is not surprising. Indeed, over 40 years of energy policy studies indicates that a transition away from a fossil fuel economy is a desirable policy preference.[2] Early studies, such as Limits to Growth[3] in 1974 and Amory Lovins’ Soft Energy Paths[4] in 1977 were critical of the dominant model of energy policy that relied on large-scale, capital-intensive, centralized energy projects particularly those wedded to fossil fuels and nuclear power. Those studies were wary of continued reliance on dwindling oil and natural gas resources.

The next wave of energy studies was born out of necessity and reaction to the energy crises of the 1970s. The distorted natural gas market, the bollixed wage and price controls on oil, the Arab Oil Embargo followed by the Iranian Embargo, and the collapse of the nuclear power industry all in a few years, put energy in the news in ways that it had not been before. Not only was energy a matter of industry and economic concern, consumers were frustrated by waiting and gas lines and were frustrated with rising energy bills. Studies by the Harvard Business School, the Ford Foundation, and Resources for the Future urged the United States to wean itself from reliance on Middle East oil precisely because of the threat of further economic dislocations.[5] To be sure, the studies also touted resource and energy conservation but did not put forward an aggressive plan for renewable resources or for energy efficiency.

Then a funny thing happened on the way to the next energy crisis – energy was out of the news for the last decades of the 20th century even though our dependence on foreign oil continued to increase through 2006. In the beginning of the 21st century, however, energy policy studies began to ramp up again. Bipartisan think tanks and nongovernmental organizations began publishing energy policy studies that continued warnings about dependence on foreign oil.[6] This new wave of studies, however, added a particular dimension to the energy policy discussion – the environment. A precursor for these studies was the UN report Our Common Future[7]that popularized the idea of sustainability for natural resources as well as for energy in order to improve the plight of everyone on the planet.

On the domestic front, the new energy policy studies concentrated on the environmental impacts of our traditional fossil fuel energy policy and began to highlight the challenges presented by climate change. In short, the policy community began to adopt a fairly wide consensus on the need for a transition to clean energy resources particularly renewable resources and energy efficiency.

The Clean Power Plan is of a piece with the trend to a cleaner future. More specifically, by linking energy and the environment, the CPP is breaking a barrier that has long existed between the disciplines of energy law and policy and environmental law and policy. It is a bit of an historic anomaly that the discipline of energy law was born in the mid-1970s in response to the crises noted above. The curiosity is that environmental law, particularly with the passage of the National Environmental Policy Act and associated environmental laws, was created as a discipline at the dawn of the 1970s. So, then, even though these two disciplines were developed close in time, they not only acted independently of each other they relied a separate set of assumptions, vocabularies, and metrics.[8]

Even though, energy law became known as a discipline in the 1970s, it had its predecessors. The most immediate predecessor was public utilities regulation. Energy law also incorporated elements of oil and gas laws and natural resources laws. By examining that welter of law, one can see that state common law and statutory law focused on the exploration and extraction of the natural resources used to produce energy. Federal laws, then, focused on the transportation, transmission, and distribution of those resources and of the electricity produced from them. In short, energy law was about exploration, production, and transportation and was grounded in the core assumption that the more energy that was produced and consumed, then the greater and more robust the economy would be.

Environmental laws were not chiefly concerned about extraction and production of resources as such. Instead, environmental laws addressed resource protection and conservation. Additionally, environmental laws focused on ecology and the human and natural environments in order to create more healthy ecosystems. Consequently, the metrics for energy law dealt energy prices, economic productivity, and the like. Environmental metrics measured the cleanliness of the water we drink, in the air we breathe, and the number of species we preserve.

At a superficial level, given the fact that energy and environmental systems are complex, the fact that they are independent regulation makes some sense. However, the physical reality is that throughout the fuel cycle from exploration to distribution to consumption, environmental consequences follow each step of that cycle. Energy and environmental laws and regulations, then, are physically linked to each other and, therefore, should be coordinated. Until the CPP, they have not been so treated.

Thus, the first significance of the Clean Power Plan is to have these two disciplines begin to address each other and to find a common language. Linking energy and the environment is a necessary step toward a clean energy future.

The second significant development of the CPP is that the federal government is now assuming a leadership role as long urged. Several of the policy studies mentioned above, as well as more recent ones, emphasize the need for federal leadership if energy and climate change are to be addressed in any meaningful way. [9] In part, the call for federal leadership resides in the fact that the US consumes 25% of the world’s energy resources and emits about 25% of the world’s greenhouse gases. If any international progress is to be made on the climate front, then the United States must play a leadership role.

On the domestic side, federal leadership is desirable for any number of reasons including the fact that while state energy initiatives are valuable in and of themselves, interstate coordination can advance a clean energy transition. On the electric side, for example, transmission line siting, a coordinated market for renewable energy credits, effective cost allocation for the development of the smart grid, and a rationalized set of renewable portfolio standards could benefit from national leadership. On the natural gas side, uniform disclosure rules for fracking chemicals, national water standards, and the like may help alleviate many of the concerns surrounding hydraulic fracturing. Further, the matter of energy subsidies, for both fossil and clean fuels, should be addressed responsibly and uniformly and national leadership in this arena should yield beneficial official results.

Thus, the Obama administration’s CPP is an important as well as necessary step in moving away from a fossil fuel economy to a clean energy future precisely because it begins to merge energy and the environment and puts federal leadership in play.

 

[1] Carbon Pollution Emission Guideline for Existing Stationary Sources: Electric Utility Generating Units, Fed. Reg. June 18, 2014) available at http://www2.epa.gov/carbon-pollution-standards/clean-power-plan-proposed-rule.

[2] Joseph P. Tomain, Ending Dirty Energy Policy: Prelude to Climate Change chs. 3 and 4 (2011).

[3] Donella Meadows et al., The Limits to Growth: A Report for the Club of Rome=s Project on the Predicament of Mankind ch. IV (1974).

[4] Amory B. Lovins, Soft Energy Paths: Toward a Durable Peace (1977).

[5] Robert Stobaugh & Daniel Yergin (eds.), Energy Future: Report of the Energy Project at the Harvard Business School (1979); Ford Foundation, Energy: The Next Twenty Years (1979); and, Sam H. Schur, et al., Energy in America’s Future: The Choices Before Us(1979) (Resources for the Future study).

[6] See e.g. Energy Future Coalition, Challenge and Opportunity: Charting a New Energy Future (2003) available at http://energyfuturecoalition.org/Resources; National Commission on Energy Policy, Ending the Energy Stalemate: A Bipartisan Strategy to Meet America’s Energy Challenges (2004) available at http://belfercenter.ksg.harvard.edu/publication/4000/ending_the_energy_stalemate.html; and,Natural Resources Defense Council, A Responsible Energy Plan for America (2005).

[7] World Commission on Environment and Development, Our Common Future (1987).

[8] Amy J. Wildermuth, The Next Step: The Integration of Energy Law and Environmental Law, 31 Utah Envt’l L. Rev. 369 (2011); Alexandra B.  Klass, Climate Change and the Convergence of Environmental and Energy Law, 24 Ford. Envt’l L. Rev. 180 (2013); Joseph P. Tomain, The Politics of Clean Energy: Moving Beyond the Beltway, 2 San Diego J. Climate & Energy L. 299 (2011-12).

[9] See e.g. Challenge and Opportunity, supra note 6; A Responsible Energy Plan for America, supra note 6; Ending the Energy Statelmate, supra note 6; Institute for  21st Century Energy, Energy Works for US: Solutions for Securing America’s Future 3 (2013) (Energy Works) available at http://www.energyxxi.org/energy-works-for-us;  William Norhdaus, Climate Casino (2013).

 

U.S. Supreme Court Narrows Greenhouse Gas Rules: What It Means for the U.S. Climate Agenda

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Today, in Utility Air Regulatory Group v. Environmental Protection Agency (EPA), the U.S. Supreme Court struck down a portion of the United States’ first regulations for greenhouse gas emissions from industrial sources. The Court held that the Environmental Protection Agency (EPA) may not apply its “Prevention of Significant Deterioration” (PSD) program to new industrial sources on the basis of their greenhouse gas emissions. Instead, EPA can only regulate greenhouse gas emissions from new sources that are already subject to the PSD program because they emit other pollutants.

This is the first Supreme Court decision on EPA’s authority to regulate greenhouse gases from industrial sources, so it has important implications for EPA’s future climate agenda—including its recently proposed rule for the electricity sector. And the varied opinions offered by the Supreme Court justices offer hints about how courts will approach the inevitable legal challenges to those regulations.

EPA’s PSD program has two basic requirements:

1) You need a permit before you build a new major industrial source of air pollution.

2) And to get a PSD permit, you must show that you are using the “best available control technology” for the air pollutants that you emit.

In this case, the Supreme Court held:

1) EPA may not require new sources to get a PSD permit simply because they will emit large amounts of greenhouse gases. The Court held that it would be unreasonable for greenhouse gases to trigger the permit requirement, because the PSD permit program is only meant to apply to the thousands of industrial sources that emit conventional pollutants, not the millions of sources that emit significant amounts of greenhouse gases.

2) But if a source needs a PSD permit anyway, because it emits other pollutants, then EPA may require it to adopt the “best available control technology” for greenhouse gases, along with other air pollutants.

I will not say anything more about the complexities of the decision, because I described them extensively in a previous post, which read the tea-leaves of oral argument in the case, and suggested the Supreme Court would reach exactly this compromise. So you can read that post both for a description of the statutory interpretation question and an explanation of the reasoning that the court eventually followed.

The most pressing question raised by the case today may be its implications for the United States’ future climate agenda, including EPA’s recently proposed rule for existing power plants. There are three important implications, and each could spell trouble for EPA’s climate agenda.

First, the Court suggested that one reason for rejecting EPA’s rule is that “it would bring about an enormous and transformative expansion in EPA’s regulatory authority without clear congressional authorization” because millions of sources would be subject to a greenhouse gas permit requirement. EPA, it is true, had suggested it would only regulate a reasonable number of them, but the court was not willing to leave that decision in the agency’s hands.  The court noted: “When an agency claims to discover in a long-extant statute an unheralded power to regulate a significant portion of the American economy, we typically greet its announcement with a measure of skepticism.”

This passage will trouble EPA. In the agency’s recent proposal to cap greenhouse gas emissions from state power sectors, which the agency calls the “Clean Power Plan,” the agency is using a long-ignored statutory provision, Clean Air Act §111(d), to overhaul the nation’s electricity sector. As noted in a previous post, §111(d) has rarely been used, and it is so obscure that when Congress passed the Clean Air Act amendments in 1990, no one even noticed that the House and Senate had passed two different versions. Talk about unheralded.

Second, the Court expressed some skepticism about controlling greenhouse gas emissions through energy efficiency, which is an important part of EPA’s climate agenda. Carbon dioxide, the most common greenhouse gas, is the inevitable result of burning fossil fuels. Clean combustion of clean fossil fuels emits carbon dioxide and water. And once carbon dioxide is emitted, it is hard to pull out of the air. So most attempts to limit carbon dioxide emissions are really attempts to limit fossil fuel combustion. The only other option is carbon capture and storage, which is usually too costly to be feasible. EPA’s Clean Power Plan and its guidance on what is the “best available control technology” under the PSD program both rely on encouraging energy efficiency.

But the Supreme Court was not willing to endorse this approach. First, it stated that it didn’t need to decide whether energy efficiency could be the “best available control technology” because EPA also said states could consider carbon capture and storage. Second, it said that even if EPA could mandate energy efficiency at new sources, it could not redesign the source, require it to consume less electricity, or otherwise micromanage industrial source proposals. In doing so, the Supreme Court handed industry arguments to use against regulators in permit proceedings.

A third important takeaway from the case is that Justice Scalia, the conservative justice that authored the Supreme Court’s opinion, was able to convince Justice Kennedy to join his opinion limiting EPA’s authority to regulate greenhouse gases. Justice Kennedy is generally considered the Court’s swing vote and he was a deciding vote on the Court’s 5-4 decision in Massachusetts v. EPA, which required EPA to consider the climate consequences of greenhouse gases from cars and trucks.

Justice Kennedy has seemed very supportive of EPA’s efforts to regulate greenhouse gases. At oral argument, he admonished industry’s lawyers that he would continue to follow “both the result and the reasoning” of Massachusetts v. EPA—and the reasoning of Massachusetts v. EPA stressed the possible benefits of greenhouse gas regulation. Until now, EPA may have been justified in believing that the Court’s swing justice would sympathize with the challenges they face in adapting the Clean Air Act to address global warming and give them the benefit of the doubt. But today’s decision shows that Justice Kennedy’s sympathy only goes so far: he is quite willing to strike down overly broad climate regulations. That may have much longer-term implications for EPA’s climate agenda—only the coming years will tell.

 

 

Full disclosure: Before entering my academic career in 2011, I represented some of the petitioners in their challenge to EPA’s regulations.

EPA’s New Power Sector Climate Rules: A Brewing Political and Legal Storm

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Today, the United States Environmental Protection Agency (EPA) proposed requiring all fifty states to adopt greenhouse gas controls for their existing power plants. And EPA went further, proposing that, together, states would have to cut U.S. power sector emissions to 30% of 2005 levels by 2030.  (You can see a chart of how much each state would have to cut here.)

These rules face strong political and legal opposition and will not go into action until 2020 at earliest. Their ultimate fate will depend on whether President Obama’s administration stands behind them, whether the public elects a new President that supports them, and whether the courts agree that EPA has authority to cap state greenhouse gas emissions. Their immediate impact is twofold: 1) it tells other countries that there’s a chance the U.S. could commit to strong greenhouse gas rules at 2015 negotiations in Paris; and 2) it sets the stage for an epic political and legal struggle over energy policy in the United States.

What happened?

EPA acted under Clean Air Act § 111(d). (The text of § 111(d) is at the bottom of this post.) This provision allows EPA to “establish a procedure” for each state to adopt “standards of performance” for existing sources of air pollutants that would have otherwise slipped through the cracks of the Clean Air Act because they 1) are not new sources, subject to new source performance standards, and 2) are not regulated under other existing source regulations in the Clean Air Act.

This section of the Clean Air Act has rarely been used: it’s designed for sources that somehow escaped the Act’s relatively comprehensive coverage. So there are few precedents for EPA to follow, and the courts that review EPA’s rule will not have past cases to go by. There are several ongoing legal disputes about the extent of EPA’s authority to adopt greenhouse gas rules under § 111(d), summarized below, and EPA is pushing for maximum authority to reduce greenhouse gas emissions across the power sector.

Can EPA Issue Greenhouse Gas Rules for Power Plants?

Some question if the Clean Air Act requires greenhouse gas controls at all for existing power plants. The published U.S. Code says § 111(d) doesn’t apply to sources that EPA already regulates under the “hazardous air pollutants” section of the Clean Air Act, § 112. And EPA already regulates power plants under § 112. So how can EPA regulate power plants under § 111(d)?

Bizarrely, the U.S. Code does not reflect the actual text of the law signed by President George H.W. Bush in 1990, and the signed law, not the Code, controls. The signed law actually included two different § 111(d) that were passed by the U.S. House and Senate, respectively, and never reconciled. (#bicameralism) The House text made it into the U.S. Code, but the Senate version is different: it only says that § 111(d) doesn’t apply to pollutants that are regulated under § 112. Although power plants are regulated under § 112, greenhouse gases aren’t, so this version would allow EPA’s greenhouse gas rules.

In 2013, William Haun, writing for the Federalist Society, suggested that the Senate and House versions should be reconciled by applying the plain text of both exclusions, which would negate EPA’s standards. Kate Konschnik, Policy Director of the Harvard Environmental Law Program, has countered with several reasons to think that Congress intended to adopt the narrower Senate exclusion, and arguing that, at a minimum, EPA should be given deference on which text to apply. EPA issued a legal memorandum with its proposed power rule, echoing Konschnik’s arguments, and noting that a 2011 Supreme Court decision also suggested that EPA can regulate greenhouse gases under § 111(d). (See memo at pp. 20-27).

Can EPA Cap State Power Emissions?

The biggest battle over EPA’s power sector rule will be over its scope.

Remember: section 111(d) lets EPA set a “procedure” for states to set “standards of performance for any existing source” that would be subject to standards of performance for new sources. So EPA is proposing § 111(d) standards to accompany the new source performance standards it has proposed for new coal and natural gas plants.

But EPA isn’t suggesting source-by-source standards of performance for existing coal and natural gas plants. Instead it’s proposing to cap all greenhouse gas emissions from each state’s power sector. How can the agency propose this?

Under previous EPA regulations, § 111(d) standards must mandate the “best system of emission reduction” for each source. You might think that meant making each coal plant cleaner, but EPA says it also means taking steps to replace coal with other power sources: 1) using natural gas plants instead, 2) using low carbon sources like hydro, nuclear, wind, and solar, and 3) lowering electricity demand through energy efficiency. In other words, the best system of emission reduction for a coal plant is simple: don’t turn it on.

EPA recognizes that state-by-state caps are a departure from its usual approach, but it offers several reasons that they might make sense here. First, it notes that a state cap “achieves greater emission reductions at a lower cost”—if EPA limited itself to the coal plants themselves it could only get small greenhouse gas reductions (4-6%) unless it was willing to demand prohibitively expensive carbon capture. Second, a state cap “takes better advantage of the wide range of measures that states, cities, towns and utilities are already using to” cut greenhouse gas emissions, such as renewable power standards and cap-and-trade systems. Third, EPA says statewide caps “reflect the integrated nature of the electricity system and the diversity of electricity generation technology.”

There’s a lot of political rhetoric right now about “power grabs” but over the next months you will see others develop careful arguments that EPA has overstepped its authority by transforming a “procedure” for state “source” standards into state greenhouse gas caps. Even before the rule came out, Nathan Richardson, at Resources for the Future, suggested that it might be illegal to apply a single cap to separate coal & gas source categories—much less use one cap for the entire electric sector. On the other hand, Kate Konschnik and Ari Peskoe of Harvard’s Environmental Law Program have defended the broader approach taken by EPA. If EPA’s rules ever go into effect, those arguments will have to be resolved in court.

Is EPA’s Proposed 30% Cut Reasonable?

EPA also says it decided to include all power sector emissions because states, industry, and interest groups all asked for compliance flexibility. And a state cap is flexible because it allows states to choose any low-carbon path that they like: natural gas or energy efficiency, nuclear or wind.

But calling EPA’s statewide caps “compliance flexibility” takes enough chutzpah to make you smile when you’re reading a 645-page proposed rule. Some states are, of course, delighted by EPA’s caps, which validate their pre-existing attempts to lower their greenhouse gas emissions. But the point of EPA’s state-wide caps is to force more greenhouse gas emissions: if EPA limited itself to coal plants, it could only cut emissions by 4-6% without shutting them all down. Many states requesting “compliance flexibility” were hoping to use alternate methods to make that 4-6% cut. Instead, EPA is requiring a 30% cut on average.

It’s as though you asked for an extension on a ten-page paper and your teacher said, “Sure—and since you have more time, make it twenty pages.” So EPA will have to convince the courts not only that it can sweep all power sector emissions into one rule, but also that it can use that wider scope to justify more dramatic reductions.

Will this Administration and Future Administrations Stand Behind This Rule?

This rule will not require states to cut greenhouse gas emissions until 2020, long after President Obama leaves office in 2016. And the proposed rules would run through 2030, by which time there may have been four more presidencies. So the future of EPA’s proposal will not turn on any particular politician; it will depend on the political and legal sustainability of the rules.

And EPA’s existing carbon rules have long been subject to political winds. In 2010, EPA promised to issue today’s proposal by July 2011, and finalize it by May 2012. Then, in the run-up to the 2012 election, it delayed these rules indefinitely. Now the rules are on again, and EPA says it will finalize this rule in June 2015, and will expect state implementing plans from 2016 to 2018, after President Obama has left office. Whether that schedule will stick remains to be seen.

 

 

(d) Standards of performance for existing sources; remaining useful life of source

(1) The Administrator shall prescribe regulations which shall establish a procedure similar to that provided by section 7410 of this title under which each State shall submit to the Administrator a plan which

(A) establishes standards of performance for any existing source for any air pollutant

(i) for which air quality criteria have not been issued or which is not included on a list published under section 7408 (a) of this title or emitted from a source category which is regulated under section 7412 of this title but

(ii) to which a standard of performance under this section would apply if such existing source were a new source, and

(B) provides for the implementation and enforcement of such standards of performance. Regulations of the Administrator under this paragraph shall permit the State in applying a standard of performance to any particular source under a plan submitted under this paragraph to take into consideration, among other factors, the remaining useful life of the existing source to which such standard applies.

(2) The Administrator shall have the same authority—

(A) to prescribe a plan for a State in cases where the State fails to submit a satisfactory plan as he would have under section 7410 (c) of this title in the case of failure to submit an implementation plan, and

(B) to enforce the provisions of such plan in cases where the State fails to enforce them as he would have under sections 7413 and 7414 of this title with respect to an implementation plan.

In promulgating a standard of performance under a plan prescribed under this paragraph, the Administrator shall take into consideration, among other factors, remaining useful lives of the sources in the category of sources to which such standard applies.

 

Smooth It Out Now (or We Need Analog Climate Policy Analysis)

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In my first year after university, I had five roommates who were extremely smart basketball fans.  I’m your typical Minnesotan hockey player, so I had a lot to learn about basketball.  I often asked my roommates questions like: Is Scott Pollard a good center? Are the Hornets hard to beat?  Does zone defense work?  They made fun of me, noting that all my questions reduced to: is X good or bad?
At the time, I thought: “Fine-grained knowledge can come later, right now I need the basics, and good versus bad is important info.”  But over the years I’ve grown to appreciate how digital thinking–i.e. 0 versus 1, on versus off, good versus bad–can lead conversations astray.
Climate policy thinking is in need of more analog thinking.  That is, we need to be more careful to note the continuous gradations between total climate policy failure and climate policy success.  Analog climate policy thinking would give us a 1) clearer picture of current climate policies and likely future policies, and 2) let us design more effective climate regulations going forward.  Let me give two examples.
1. Current and Future Climate Policies: A Continuous Spectrum
 
When you talk climate policy you’re usually talking about unilateral national, state, provincial, or local regulations, because there’s no enforceable international greenhouse gas treaty.  At the same time, greenhouse gas emissions are global, so one of the primary goals of these domestic regulations is to encourage other countries to adopt stricter climate regulations.
When I present research on domestic climate regulations around the world, I almost always get a very digital question: “How can you encourage other countries to act?  Good countries will help out voluntarily, and you’ll never convince the bad actors.”  When I present to an audience of U.S. generalists, they generally mention China as an example of a bad actor, and when I present outside the U.S. (or to U.S. environmentalists) they usually mention the U.S. as a bad actor.  Almost everyone mentions Europe as a good actor.
This question makes clear that the good actor/bad actor frame is actively confusing the questioner.   Even if we could say that some countries are doing better than others, every country is constantly striking a balance between climate and economic goals, and each could regulate incrementally more or less.  Europe has a cap & trade system, it’s true; but it doesn’t cover all emissions, and its permit price to emit a ton of carbon has fallen below 5 EUR.  (That’s less than half Alberta’s 15 CAD carbon price, although Alberta’s regulation applies to far fewer emissions.)  And on the flip side, China has adopted numerous policies that will slow its rising greenhouse gas emissions, including massive deployment of renewable energy.  (Here’s a useful Congressional Research Service summary from 2011: http://bit.ly/1dIi1Je).  Even Saudi Arabia is planning a gigantic expansion of clean energy. (http://bit.ly/1dIi1Je).  Digital thinking is giving academics an inaccurate view of the world.
2. Climate Policy Mechanisms: Encouraging More Action in a Continuous Climate Policy World
 
Digital on/off thinking has infected our climate policy design as well.  Again, one of the most important goals for unilateral climate regulations is encouraging action elsewhere.  And one of the most promising ways to do that is with matching commitments: adopting climate regulations that automatically grow more strict when other countries strengthen their own climate regulations.  As I explain in this paper, http://bit.ly/uniclimreg (see pp. 15-21), these matching policies would encourage other countries to act by rewarding them with increased environmental benefits.

But the limited attempts at using matching commitments so far have been fatally flawed by on/off thinking.  For instance, the EU has said it will increase its greenhouse gas reductions from 20% to 30% if developed nations adopt “comparable” reductions through a “global agreement.”  And Australia has a similar scheme.  But these matching commitments provide no incentive to the actual policymakers around the world who are struggling with decisions to marginally tighten or loosen greenhouse gas regulation almost every day, because no individual regulator can secure a global agreement.  These on/off commitments should be replaced with matching commitments that target climate regulations that foreign regulators can actually deliver, and smoothly ratchet up in response to stricter commitments.  Perhaps the EU could commit to match a specific percentage of reductions in the US, Canada, or Australia.  And these commitments could even target regulators in important states or provinces like California and Alberta that are calibrating the strictness of their climate policies.

Analog thinking also reveals the problems with the current global treaty paradigm. No country can credibly commit to years of “good” climate regulation in a single treaty.  Climate policy is too complex and covers too many politically-charged areas.  Often even countries that have “model” policies, like Australia’s ill-fated carbon tax, have found loopholes with major climate impacts, such as coal exports.  (See also, British Columbia’s tax and its proposed LNG exports.)  And even on their own terms emissions pledges will always be fragile in a democracy, as has been repeatedly shown in Australia, Canada, and Japan.
This same problem will likely hamper more modest plans for climate clubs.  I share the general interest in the recent climate pact between California, Oregon, Washington, and British Columbia.  But remember the Western Climate Initiative: it was formed by Arizona, California, New Mexico, Oregon, and Washington in 2007 . . . and then abandoned by Arizona, New Mexico, Oregon, and Washington in 2011.  Fool me twice, shame on me:  analog climate thinking says we cannot be surprised when other states and countries do not live up to their climate commitments.  We need to find ways to continuously encourage them to adopt somewhat stricter regulation, whether or not they are living up to the terms of these commitments.  We need to focus more on analog matching commitments and less on promises to be good.
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And yes, I’m still working on my analog basketball analysis.  But my former roommates still make fun of me.  After watching this recent clip (starting at 1:30), one told me I was simply ahead of my time: http://watch.thecomedynetwork.ca/the-daily-show-with-jon-stewart/full-episodes/the-daily-show-with-jon-stewart—october-29-2013/#clip1033595. (U.S. version: http://huff.to/18Tm0xu.)