Graduation Year


Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts


Politics and International Relations

Reader 1

Nancy Neiman

Reader 2

Vanessa Tyson

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© 2021 Camryn A Fujita


Cap-and-trade is an environmental policy that is considered a “market-based” approach to addressing climate change. This policy option has gained more attention over the years because of the perception that cap-and-trade harnesses the forces of the free-market to benefit the environment and society by reducing emissions efficiently. Cap-and-trade promises to meet environmentalist and business interests in the middle by incentivizing a transition away from greenhouse gases (GHGs) without politicians placing heavy regulations on industry. On the other hand, critics of cap-and-trade challenge this narrative of superiority by questioning the policy’s presumed efficiency, neutrality, and environmental effectiveness. This thesis, on the contrary, argues that beyond the debate over efficiency, referring to cap-and-trade as “market-based” is inaccurate and misleading. A closer look at the history and policy design of the first mandatory cap-and-trade program in the United States, the Regional Greenhouse Gas Initiative (RGGI), demonstrates how political influence, motivated by the absence of federal leadership, changing external market conditions, and political rent-seeking, created the groundwork for state collaboration on a carbon allowance market in the first place and played a substantial role in shaping important aspects of RGGI’s policy design. A politics-based analysis of RGGI shows that cap-and-trade’s effectiveness as an environmental policy is compromised by political influence and bias.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.