THE ONE PERCENT PROBLEM

Parties frequently seek exemption from regulation on the ground that they contribute only a very small share to a problem. These "one percent arguments" are not inherently questionable; it can be efficient to exclude relatively small contributors. These arguments also garner broad acceptance in part because they exploit cognitive biases that induce individuals to discount or ignore small values. But, when a regulatory problem can be solved only by regulating small contributors, accepting one percent arguments creates what we call the one percent problem. This Article shows that this general problem for regulation has particularly damaging effects on climate change policy: The global character of the climate change problem allows many sources of carbon emissions to make one percent arguments, but the climate problem cannot be solved without attending to these sources. This Article then isolates a gap in U.S. climate policy that is a critical barrier to addressing the one percent problem for climate change. Specifically, Congress currently legislates and appropriates without calculating the emissions consequences of its actions or adhering to an emissions budget. Both are necessary. Congress has long responded to one percent problems in managing the federal deficit by requiring cost disclosures and budget offsetting. Requiring Congress to disclose the carbon emissions arising from legislation will treat carbon costs on par with financial costs, and bring Congress's emissions disclosure duties in line with those that already apply to federal agencies and many industrial sources. Adopting a budgeting precommitment strategy of last resort-a carbon pay-as-you-go rule-will directly confront the analytic slippage exploited by one percent arguments.