ABSTRACT
States have a variety of policy tools to address climate and clean energy, but there is uncertainty about their role in the future. The current debate over the Clean Power Plan will shape the future of state energy policy. The regulations would require states to reduce emissions from power plants to mandated levels determined in the rule-making process. States would have flexibility to achieve the necessary targets using a variety of policy tools including fuel switching, investments in clean energy technologies, and improvements in energy efficiency. Potential state actions to address climate change could include cap-and-trade systems, other forms of carbon-pricing, or portfolio standards. To meet these goals, states would need to continue to expand and enhance their climate and clean energy activities with the support of the new federal requirements. While this would put federal officials in charge of setting the standards, it would continue to leave innovation in financing and implementation to the states.
