Due to the absence of a national framework to regulate emissions, regions, states and cities have moved to reduce emissions on their own incentive, he says.
There is considerable pressure on the current US Administration, says Stavins, particularly as the Supreme Court ruled the executive has the power to cap CO2 emissions and the EU is urging the US to "re-establish its international credibility". However, he warns, any action taken by the US will be costly for its economy and should be seen as an "inconvenient truth".
A market-based approach should be the main pillar of any policy to target emissions, says Stavins, for which there are two options: either a cap-and-trade system or an unpopular carbon tax, with the former the more likely.
Cap-and-trade systems have been used before in the States, reducing sulphur dioxide and nitrous oxide in 1995, the phase-out of leaded gasoline in the 1980s and CFCs, according to the author.
Despite the cap-and-trade system's relative success in cutting conventional air pollutants, it has made "very limited" progress in cutting CO2 emissions, claims Stavins. He continues by explaining the EU trading system, describing it as a "considerable success", but warns it is too early to assess it accurately.
A number of regional proposals have been discussed in the US, including a yet-to-be-implemented cap-and-trade system involving ten north eastern states, due to be realised in 2009. California has approved a Green Gas Solutions Act due to start in 2012, which seeks to bring emissions down to their 1990 levels by 2020, and it might employ a cap-and-trade approach, reveals Stavins.
The author vigorously argues in favour of a cap-and-trade approach to tackle the effects of climate change in the States as it "avoids the US political aversion to taxes" and has a relatively successful record. A federal system, adds Stavins, would bring an end to the disjointed efforts at state level and create a link for eventual harmonisation with its international counterparts.
As for incurring the wrath of fossil fuel producers, Stavins believes this would not be a huge concern as most of the costs associated with cap-and-trade are generally passed on to consumers.
He concludes by saying that any action taken by the US will be dependent on the actions of other countries, as only a cooperative solution will be the most pragmatically workable one. The primary strategic consideration of a US emissions policy should be to re-establish international credibility, he adds.