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What is the current state of play with regards to carbon pricing in the United States, and how might this change in the coming years?

Linden Lansdown

The current state of play with regards to carbon pricing in the United States is a mixed bag of policies, regulations, and initiatives that vary greatly across different states and regions. At the federal level, there is currently no comprehensive carbon pricing scheme in place, although there have been several attempts to introduce such measures in recent years.

One notable example is the proposed Energy Innovation and Carbon Dividend Act, which aims to establish a national fee on carbon emissions and return the revenue generated to citizens in the form of dividends. However, this bill has yet to gain significant support from Congress and faces staunch opposition from the fossil fuel industry.

On the state level, some forward-thinking jurisdictions have implemented their own carbon pricing policies, such as California's cap-and-trade system and the Regional Greenhouse Gas Initiative in the Northeast. These initiatives aim to reduce emissions and incentivize investment in clean energy through the use of market-based mechanisms.

However, other states have taken a much more lax approach to carbon pricing, with some even actively fighting against it. For example, the state of Oklahoma recently passed a law prohibiting local governments from adopting policies that would create fees or taxes on carbon emissions.

So, how might this change in the coming years? There are several factors that could influence the future of carbon pricing in the United States. Firstly, the increasing urgency of addressing the climate crisis could spur more support for carbon pricing measures and stronger resistance to the fossil fuel industry's influence.

Secondly, the outcome of the 2020 presidential election could have a significant impact on the direction of climate policy in the country. While Democratic candidates have generally been more vocal about the need for climate action and carbon pricing, Republican incumbents have largely been resistant to such measures.

Lastly, the development of new technologies and innovations in clean energy could also play a role in shaping the future of carbon pricing. As renewable energy becomes more cost-competitive with fossil fuels, the need for market incentives to accelerate the transition to a low-carbon economy may become less urgent.

Overall, the current state of carbon pricing in the United States is complex and varied, with significant political and economic challenges to overcome. However, the growing urgency of the climate crisis and the potential for new technologies to transform the energy landscape may provide opportunities for progress in the coming years.