There’s renewed interest in climate change on Capitol Hill. The 116th Congress (2019–2020) has seen a flurry of climate-related hearings, introduction of climate principles, and there’s even growing bipartisan interest in establishing market-based approaches to address climate change. Approaches proposed to date include carbon tax, cap and trade, and a clean energy standard.
Within the first eight months of this Congress, we’ve seen the introduction of six carbon tax and cap-and-dividend proposals, and we are likely to see more proposals introduced later. The growing attention is only partly a result of the change in control of the House of Representatives. It also reflects encouraging news, as nearly half of these proposals have been introduced or are cosponsored by Republicans. Bipartisan cooperation will be crucial for lasting progress. The six proposals are:
Five of these proposals would establish a carbon tax (or “carbon fee”) and one would establish a cap-and-dividend program (a cap-and-trade program that rebates program revenues to consumers). The proposals differ on many elements including their targets, starting price level (see Figure 1) and how to use the revenues. For a detailed comparison, see our new fact sheet.
While these carbon pricing proposals may be unlikely to get enacted in this Congress, they have restarted bipartisan conversations on the variety of policy design options to price carbon.
This growing bipartisan interest and discussion of design options is creating the foundation for action in the near-term. Ultimately, we will need a constellation of policies to decarbonize our economy and to avoid the worst impacts of climate change. Carbon pricing is the North Star in this constellation, guiding the way to complementary and cost-effective policies to reduce greenhouse gas emissions.