It is generally accepted by climate-change activists that burning fossil fuels, which put CO2 into our ecosystem, is the principal cause of climate change. And it is generally accepted that “putting a price on carbon”, taxing the fuels that emit the CO2 (and therefore price-favoring energy sources that do not) is a useful strategy.
Putting a price on carbon can be done two different ways. One is called “cap and trade” — setting limits on how much CO2 we will accept and selling “permits” to burn the fossil fuel that will produce that limited amount. The demand for those licenses effectively determines the price paid for them.
The other method is simply to “tax” the fossil fuels based on the emissions they generate.
There is a difference of opinion among activists about which is better. But the big differences of opinion, the ones that cause disagreements that slow down the efforts to put a price on carbon, are about “what to do with the revenue raised”.
Dedicated activists often want to devote those revenues to promote green energy or to redress people suffering climate injustice. Other activists (including one of the founders of this site) support carbon-fee-and-dividend, by which all the revenue raised pricing carbon is simply returned in equal shares to everybody. This approach has the advantage of being much more politically palatable since most people — 70 percent or more — get more back in their carbon “dividend” than the fees cost them in increased energy costs.
Our own Mike Shatzkin spoke to these issues at the Sarasota Institute in the spring of 2020.
02/17/22
CBO and the staff of the Joint Committee on Taxation projected the budgetary effects and the change in emissions of carbon dioxide (CO2) and other greenhouse gases (GHGs) that would stem from a potential tax…
09/16/21
Deterring the use of fossil fuels, such as coal, fuel oil, and gasoline, is crucial to reducing the buildup of heat-trapping greenhouse gases in the atmosphere. Carbon pricing provides across-the-board incentives to reduce energy use…
02/08/21
Michael Greenstone, EPIC Director, said reverting to the Obama-era calculations would yield a social cost of carbon of $125 per ton, assuming it took into account lower interest rates in recent years.
10/01/20
The potentially adverse impact of carbon pricing on the competitiveness of businesses and economies has been a matter of concern to industry and policymakers.
10/01/20
Putting a price on carbon is necessary to reduce emissions but sufficient to get to full decarbonization by 2050. Complementary policies with a carbon price are needed to achieve full decarbonization.
08/11/20
The Nicholas Institute assesses carbon pricing schemes for environmental integrity, cost-effectiveness, and distributional equity. Since the 2007 landmark Supreme Court decision Massachusetts v. EPA, we have explored carbon trading as a method for regulating emissions…
08/11/20
There is widespread recognition and scientific consensus that in order to stabilize the climate and prevent the worst consequences of the climate crisis, greenhouse gas emissions must be reduced by at least 80 percent by…
08/11/20
When carbon emissions cost money, we produce less of them.
08/11/20
Q&A with Frank Wolak, director of the Freeman Spogli Institute for International Studies (FSI)’s Program on Energy and Sustainable Development(PESD), and Mark Thurber, associate director for research of PESD. Written with Joshua Kenway.
08/11/20
Climate change presents serious threats to the economy, the environment and national security. To address these threats, a growing number of influential businesses, scientists, NGOs, policymakers, and thought leaders are calling for a carbon tax,…
07/24/20
Carbon pricing is an approach to reducing carbon emissions (also referred to as greenhouse gas, or GHG, emissions) that uses market mechanisms to pass the cost of emitting on to emitters. Its broad goal is…
06/01/19
Compared to command-and-control regulations, carbon pricing is a market-based mechanism that creates financial incentives to reduce greenhouse gas (GHG) emissions. Ten states that are home to over a quarter of the U.S. population and account…
01/19/19
Citizens’ Climate Lobby is a non-profit, non-partisan, grassroots advocacy organization focused on national policies to address climate change. By building upon shared values rather than partisan divides, and empowering our supporters to work in keeping…
02/14/20
FCNL believes that carbon pricing is one of many essential tools that Congress should use to address climate change and shift towards a clean energy economy. While we have not endorsed any particular bill at…
