The “Lone Grid” State: Texas as the Ideal Location for State-Level Climate Regulation

By: James D. Friedland

13th December, 2013

Given the current state of national politics, it is highly unlikely that the United States Congress will pass comprehensive climate legislation any time soon. In the meantime, that inaction has relegated American climate policy to the states by default.1 Under the federal system, states serve as “laboratories of Democracy,” not just because each state has the freedom to make its own choices, but also because each state is inherently different and therefore experiments with different solutions to the same challenges. As this Field Report explores, these differences between states can have surprising implications, especially for greenhouse gas (GHG) regulation.

Part I of this Field Report explains how the “leakage” of emissions facilitated by interstate electrical infrastructure can undermine state-level carbon regulations—unless states account for emissions from imported electricity. Part II describes how the dormant Commerce Clause impedes state-level regulation of interstate electric imports. Part III discusses the structure of Texas’s unique, intrastate power grid. Part IV argues that because the Texas grid is isolated, the state should be able to enact a strong climate program without requiring the anti-leakage import regulations that expose other state programs to dormant Commerce Clause litigation. As a result, this Field Report concludes that Texas is actually better situated than any other state to enact a strong, subnational climate program.

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