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I recently attended an exciting one-day conference comparing climate policy in California and Sweden.  Hosted by Resources for the Future, ClimateWorks Foundation, and the Swedish Mistra Indigo program, it challenged participants to answer, What is the Value of Being First?
In terms of climate policy, California and Sweden lead the pack, adopting measures to mitigate emissions long before most other states. Passed in 2006, California’s AB32—loved by its supporters and loathed by its opponents—is considered one of the most comprehensive and innovative climate policies around, incorporating a cap-and-trade system as well as climate-friendly changes to land-use policies, transportation development, and fuel-content.  And since 1991 Sweden has applied a tax on carbon, now over a $150/ton.  Although there are certain notable exemptions to what is covered by the tax, the Swedes have used it to offset some other taxes and simplify their entire tax system, something I’m sure the Swedes enjoy on tax day.

California’s and Sweden’s climate policies are not without controversy, as one could imagine.  Being a policy testing ground, there are bound to failures, or at the very least, under-performing policy outcomes.  While this learning is critical—for both first movers and those that move later—it’s easy to point the finger at failure, and there’s always the concern that a not-well-designed policy will cost more than it’s worth, hurting the economy and by extension people’s well-being.   California is facing that challenge now, just as many of the policy levers in AB32 are now being implemented.

But once-controversial policies, proven effective, can quickly become embedded and broadly popular.  British Columbia’s revenue-neutral carbon tax—a wonky name for a surprisingly simple and effective concept—was hotly opposed four years ago.  However, in recent elections, it was derided by former opponents as not green enough.  In the US, a refreshingly ideologically-diverse group has rallied around a carbon tax shift as a means to spur innovation and cut emissions without raising taxes.
For governments, but also businesses and NGOs, there’s much to be gained and much to be potentially lost by moving first, whether we’re talking climate or other pressing issues.  So what do you think?  What is the value—and the risk—of moving first?

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