What States Can Do – Part I: Climate Change Policy


Most attention in public policy focuses on what happens at the national level. That’s inevitable but states are often test beds for reform. In this series of blogs, I will look at what states can do to set the policy agenda.

Nowhere has the leadership role of states been more apparent than with climate change policy. That was certainly true in Australia until recently, with former conservative Prime Minister John Howard aligning himself with President Bush in first denying the scientific evidence for global warming and then decrying action to address climate change as contrary to the national interest. It was up to the states to fill the policy void.

In the US, we saw strong leadership by states such as California in embracing renewable energy and tougher emissions standards. We also saw clusters of states working together to establish emissions trading schemes such as the Regional Greenhouse Gas Initiative involving Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont. These states have not only capped but will reduce CO² emissions from their power stations 10% by 2018.

States also took the lead in Australia, one of the nations at greatest risk from global warming with the potential loss of high production farming land as well as serious threats to our precious water resources. Action by states makes sense given the majority of decisions affecting both the environment and our climate are made at the regional level.

While Premier of South Australia, I was also Minister for Sustainability and Climate Change, as well as Minister for Economic Development. I wanted to demonstrate that a reformist government could be pro jobs and pro growth while at the same time being a leader in environmental protection. Through my role with The Climate Group and its States and Regions Network, I have worked closely with state governments internationally, including a number of US states, to share and sometimes steal policy ideas that work.

When I was elected Premier in 2002 there was not one single operating wind turbine in South Australia. Today, 26% of electricity generated in my state comes from wind, edging out coal fired power for the first time. How did this happen? We streamlined our regulatory environment to make it easier for energy companies to gain quicker approvals to build wind farms in order to take advantage of Federal schemes and quotas. This didn’t happen in other states where the wind was strong but not the political will.

We also campaigned aggressively to convince renewable energy companies we were hungry for their business and would make them welcome. We introduced payroll tax rebates for the construction of large-scale renewable energy projects. Now, with only 7.2% of Australia’s population, we have 54% of the nation’s installed wind power and about 90% of Australia’s geothermal hot rocks development. South Australia reached the Federal Government’s target of 20% of electricity coming from renewables by 2020, nine years ahead of schedule. We also had a 15% drop in emissions during the past five years despite strong economic and employment growth.

Inspired by matching Governor Schwarzenegger’s ambitious target, we are now on track to reach 33% of our power coming from renewables by 2020. With the help of Stanford Climatologist, the late Stephen Schneider, we passed Australia’s first climate change legislation which, in addition to setting targets, provided a framework for voluntary agreements with industry sectors to reduce their emissions. Groups as diverse as the cement industry, the Anglican Church, local government and even regions became partners. First to sign up was our wine industry which was keen to demonstrate to customers in the US and Europe that it could not only produce world class wines but be environmentally conscious doing so.

South Australia also passed Australia’s first solar feed-in legislation, which established a scheme that paid householders a premium rate for power generated from their roof top installations. This was successful in encouraging a more rapid take up of solar power than in other states. We also followed California and Washington state by changing emissions standards to effectively preclude the building of future coal fired power stations; again followed California in setting tougher efficiency standards for air conditioners that cause massive spikes in electricity usage on the hottest days, and following my visit to New York, we are looking at ‘cool roofs’ to deliver significant reductions in peak energy demand.

By sharing ideas, sub-national governments in the US, Australia and elsewhere have proven to the public and to federal policy makers that leadership and progress is possible. This has produced dividends in Australia with the national government of Prime Minister Julia Gillard embracing a new carbon pricing era designed to cut CO² pollution, drive investment in clean energy and make our nation’s biggest polluters pay for the greenhouse gas emissions they create.

This Blog was published on the Center for National Policy website.

Mike Rann is Fellow for Democracy and Development with the Center for National Policy, Washington, D.C.