In keeping with Obama’s campaign promise to fight against climate change, four steps that can accomplish that goal are outlined below:

1. The Administration must create certainty about long-run carbon prices – the key drivers of investment. President-elect Obama’s long-run goal of cutting emissions 80% below current emissions by 2050 is broadly consistent with what most scientists tell us will stabilize the climate at safe levels. That should remain the president-elect’s top priority.
2. Near-term targets – emissions targets for the next decade – are also important, but the near-term costs of achieving these targets should be monitored. The targets must be sufficiently stringent to send an appropriate price signal to companies investing now, but the legislation should also include provisions to contain near-term costs in case advanced technology turns out to be less plentiful than anticipated.