This paper synthesizes the reasons for California’s successful climate policy. It considers the relative strengths and weaknesses of different types of policy, concluding that performance standards have led in reducing statewide emissions. Market failures beyond the lack of a price on carbon mean the best policy approach combines the three types of policy: performance standards, economic signals, and research and development (R&D).

In October 2015, Energy Innovation launched Energy Policy Solutions, an assessment of climate and energy policies to help meet decarbonization goals. We created a computer model, the Energy Policy Simulator, to quantitatively measure the cost and emissions impacts of more than 50 policies across all economic sectors. This page summarizes key findings from our model analysis, including recommended policy packages for meeting the U.S. 2025 emissions target and the Clean Power Plan target.

It pays to adopt smart energy policy sooner rather than later. If policymakers wait just four years (until 2020) to take action and want to achieve the same emissions reductions by 2030, they risk nearly $400 billion in additional costs. Policy implementation should start early to take advantage of natural capital stock turnover and the increased productivity of an efficient system.

Energy Innovation identified a cost-effective package of six policies that the U.S. could use to meet the Clean Power Plan at a national average scale. This scenario actually exceeds the emissions goals in later years, as policies designed to meet earlier targets continue to reap benefits in later years, and saves the U.S. more than $40 billion between 2016 and 2030.

Discover the most effective policies to decarbonize America’s economy at the lowest cost. The Energy Policy Simulator was designed to empower decision makers to find the best course toward a low-carbon U.S. economy. The Energy Policy Simulator works in real-time to measure the cost and emissions impacts of more than 50 climate and energy policies.

This paper describes Energy Innovation's Energy Policy Simulator, a system dynamics model that assists in selecting policies that will allow China to achieve its emissions reduction goals. The model's results find that China can peak its carbon emissions before its target year of 2030, and this is done most cost-effectively via a package of policies supporting a diverse set of technologies.

This report defines the benefit of upside hedge value: the extra avoided expenditures on gasoline and diesel fuel that accrue when their prices spike as a result of climate policies like AB 32 (California's Global Warming Solutions Act). It develops two historically grounded price spike scenarios: a moderate spike of 25 percent and a large spike of 50 percent. After accounting for short-term price elasticity of demand effects, the upside hedge value is estimated to be between $2.4 billion and $5.2 billion (2007 dollars) for the moderate and large shock scenarios, respectively.

This report analyzes the macroeconomic impacts of the U.S.'s 2011 proposal to extend performance standards for cars and light trucks , with particular attention to the employment effects. The proposed standards would increase vehicle fuel economy to 54.5 miles per gallon and reduce emissions to 163 grams of CO2 per mile by 2025. The report concludes that these proposed standards will create new jobs, increase real wages, and boost GDP by 2030.