Chapter 7: Climate federalism, regulatory failure and reversal risks, and entrenching innovation incentives
The traditional federalism literature, which focused largely on static allocations of governmental authority at the federal and state level, has expanded to include multi-level governance and shifting, overlapping and shared authority allocations. These more nuanced versions of federalism are useful frames for understanding the governance of energy development – an area that is growing within the United States due in large part to unconventional oil and gas resources and renewable energy development. This chapter describes where authority over energy development currently rests, providing examples of states that leave most control to local governments, others that preempt most local control, and still others that use ceiling or floor preemption or other types of shared authority. It also briefly explores the more minor federal and regional roles in energy governance. After describing existing authority allocations, this chapter assesses how governance might need to change regardless of the metric of ‘good governance’ that we follow. It concludes that a nascent energy federalism literature shows that shared authority over energy development is needed and suggests approaches for ensuring that all governments and stakeholders have a role in energy governance. These approaches include avoiding ‘zero-sum’ allocations of authority to any one government, leaving some backstop authority with courts, opening up decision-making processes, collecting and reporting more information about impacts so that participants in decision-making processes are better informed, and providing for more consistent bonding of energy infrastructure and payment for damages caused by this infrastructure.
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