Recent dramatic and deadly increases in global wildfire activity have increased attention on the causes of wildfires, their consequences, and how risk from fire might be mitigated. Here we bring together data on the changing risk and societal burden of wildfire in the US. We estimate that nearly 50 million homes are currently in the wildland-urban interface in the US, a number increasing by 1 million houses every 3 years. Using a statistical model that links satellite-based fire and smoke data to pollution monitoring stations, we estimate that wildfires have accounted for up to 25% of PM_2.5 in recent years across the US, and up to half in some Western regions. We then show that ambient exposure to smoke-based PM_2.5 does not follow traditional socioeconomic exposure gradients. Finally, using stylized scenarios, we show that fuels management interventions have large but uncertain impacts on health outcomes, and that future health impacts from climate-change-induced wildfire smoke could approach projected overall increases in temperature-related mortality from climate change. We draw lessons for research and policy.

We report on an economic experiment that compares outcomes in electricity markets subject to carbon-tax and cap-and-trade policies. Under conditions of uncertainty, price-based and quantity-based policy instruments cannot be truly equivalent, so we compared three matched carbon-tax/cap-and-trade pairs with equivalent emissions targets, mean emissions, and mean carbon prices, respectively. Across these matched pairs, the cap-and-trade mechanism produced much higher wholesale electricity prices (38.5% to 52.6% higher) and lower total electricity production (2.5% to 4.0% lower) than the \equivalent" carbon tax, without any lower carbon emissions. Market participants who forecast a lower price of carbon in the cap-and-trade games ran their units more than those who forecast a higher price of carbon, which caused emissions from the dirtiest generating units (Coal and Gas Peakers) to be signicantly higher (15.2% to 33.0%) than in the carbon tax games. These merit order \mistakes" in the cap-and-trade games suggest an important advantage of the carbon tax as policy: namely, that the cost of carbon can treated by rms as a known input to production.

Any mention of climate policy was noticeably missing from President Obama's recent state of the union address. This is unfortunate because every day of inaction on climate policy by the United States government is another day that American consumers must pay substantially higher prices for products derived from crude oil, such as gasoline and diesel fuel. Moreover, a substantial fraction of the revenues from these higher prices goes to governments of countries that the US would prefer not to support.

To maximize environmental benefits from the rollout of its cap-and-trade program for greenhouse gas emissions, California should focus on achieving a positive demonstration effect from the program by doing as little as possible to harm the state's economy, as transparently as possible and as fast as possible.

Unconventional natural gas and the technologies developed to extract it in the U.S. point to a possible lower carbon energy future for China that can be facilitated through international cooperation between them, improving China's reliance on domestically produced coal, and creating economic and environmental benefits for both countries as well as the rest of the world.