This paper charts the evolution of mainly empirical research at the NIESR over the 1970s and 80s. As was all too evident there were very large discrete technical improvements in data handling and manipulation over this period. Less well appreciated were the effects on the economy of major supply-side shocks coming from the World economy leading to ‘Stagflation’ and, interconnected but somewhat later, in the UK, marked changes in macro policy regime. This latter was strongly influenced by the seminal papers of Lucas (1976) and Sims (1980); both highly critical of the then current practices in macroeconomics, though each having very different intellectual stances. The response in the NIESR was to engage at an early stage in these innovations; applying the mantra that an informed criticism was more efficient than an uninformed one. During this period it became a leader in the econometrics of applied macro modelling under different expectations assumptions, including the rational expectations hypothesis (REH). Throughout, it remained critical of the anti-empirical drift encouraged in the Lucas Critique, criticism borne out more recently by the financial instability of the 1990s and the crisis that followed.

This paper develops a framework for analysing intergovernmental relationships around greenhouse gas (GHG) mitigation policies along a cooperation-conflict spectrum that affects the probability of their enactment. Cooperative policies, such as federal fiscal transfers to sub-national governments, facilitate enactment. Coordination policies, including enabling and funding mechanisms, promote interdependence between jurisdictions. Competitive policies, such as federal performance standards and price mechanisms, increase political conflict over authority. We categorise 23 policies developed by over 1,500 state stakeholders into the cooperation/coordination/conflict taxonomy. If scaled to the national level, these policies could reduce GHG emissions by over 3 billion tonnes by 2020 and generate nearly 2.2 million jobs (1.19 per cent above baseline projections). Nearly two-thirds of the job gains are from coordinated and cooperative policy options that are unlikely to occur under the status quo policy process. We recommend a national climate action planning process to reduce GHG emissions while increasing aggregate economic efficiency.