Federal policy receives the bulk of the nation’s attention to energy and climate matters, from President Obama’s Clean Power Plan to President Trump’s withdrawal from the Paris Agreement. Yet much of our nation’s energy and climate policy is made by governors, state legislatures and agencies across the country. However, it can be very difficult to track these disparate actions to understand where progress is being made and which states are falling behind. Beyond the Beltway provides insight into the range of factors – political, geographical, economic and more – that determine the immensely varied state energy and climate policies across the nation.

This Report is a compilation of a series of Legal Planet blog posts written in late 2017 and early 2018. Legal Planet is a collaborative effort of the UC Berkeley and UCLA Schools of Law and is accessible at www.legal-planet.org. The original posts were compiled here and edited for consistency.

Environmental law focuses on regulating the production of energy and goods. Less attention has been given to reducing the environmental footprint of consumption. This Article brings together several strands of research, including psychological and economic research on subjective wellbeing; research on energy efficiency; writings by urban planners on sustainable communities; and recent work on individual behavior and sustainability. The conclusion, in a nutshell, is that changes in consumption of goods and energy, assisted by improvements in urban design and transportation infrastructure, can significantly reduce energy use and environmental harm. A variety of legal tools are available to promote these changes. Remarkably, many of the steps needed for sustainability can actually improve quality of life, adding to individual satisfaction. Thus, sustainability for society and the pursuit of individual happiness need not be at odds.

The Pareto principle is often considered self-evident, particularly by economists. On close examination, however, it is much more problematic than is commonly believed. Preference satisfaction is only imperfectly related to values such as individual welfare and autonomy. Moreover, preferences can change during transactions or because of shifts in legal regimes, presenting knotty conceptual difficulties. Finally, complete adherence to the Pareto principle may be incompatible with other, equally appealing ethical standards. As Sen showed, the Pareto principle is inconsistent with at least some forms of libertarianism. More recently, Kaplow and Shavell have shown that if we rigidly adhere to Pareto, we thereby foreclose the possibility of giving any independent normative weight to values such as fairness or human rights. Thus, appealing as it may be, rigid adherence to Pareto may come at too high a cost. Given these various qualifications on the scope and appeal of the Pareto principle, it is best regarded as a useful rule of thumb rather than a bedrock ethical imperative.

Cap and trade is controversial in part because of claims that it is unjust, an issue that was highlighted by recent litigation against California’s proposed carbon market. This essay considers an array of fairness issues relating to cap and trade. In terms of fairness to industry, the conclusion is that distributing free allowances overcompensates firms for the cost of compliance, assuming any compensation is warranted. Industry should not receive, in effect, ownership of the atmosphere at the expense of the public. Environmental justice advocates argue that cap-and-trade systems promote hotspots and encourage dirtier, older plants to continue operating to the detriment of some communities. Designers of cap-and-trade systems should be alert to possible hotspots, particularly in disadvantaged communities. Little reason exists, however, to believe that any such hotspots are systematically linked with disadvantage. Finally, any regulation of emissions raises costs, with a disproportionate impact on low-income consumers. This effect can be greatly ameliorated through adroit use of revenue from auctions. The bottom line is that fairness issues are not a deal-breaker for cap and trade, but do deserve thoughtful consideration in designing a system.