As different statewide greenhouse gas (GHG) reduction policies continue to emerge in the United States, more and more businesses are calling on the federal government to enact a single, uniform policy. The prospect of complementary policies between different levels of government-as well as the potential for conflicting and even duplicative regulations-could have significant implications for business. This installment of WRI’s “Bottom Line” series explores the fundamental debates about, and potential outcomes of, different degrees of state and federal policy action.

What is the rationale for a single, federal climate change policy?

Advocates of a single federal policy seek a level playing field for all businesses affected by the policy, which would mandate uniform regulation across all 50 states. Also, it is easier for corporations to abide by a single regulation rather than adhere to many regulations in different jurisdictions. Given that not all states would enact climate policy, strong federal policy could achieve greater emission reductions than state-led policy action alone.

What is the rationale for allowing states to maintain and develop their own climate change policies?

States can serve as laboratories for developing new, innovative policies, and states have historically acted more quickly than the federal government in designing and implementing new policy ideas. State policy innovation is also seen as the impetus for pushing the federal government to act. States can tailor policies to fit their particular circumstances-such as geography and natural resources-and they are arguably more aware of their unique stakeholder interests than is the federal government.