There are various market-based approaches to pricing carbon (e.g., carbon tax, cap and trade, clean energy standard). All of these approaches can reduce emissions cost-effectively while driving clean energy innovation. This factsheet compares two carbon tax proposals introduced in the 118th Congress (2023–2024).

Carbon pricing offers a cost-effective way to reduce greenhouse gas emissions. Twelve states are already pricing carbon, and a number of states are considering similar action. This factsheet summarizes and compares four federal carbon pricing proposals that have been introduced so far in the 118th Congress (2023–2024), highlighting similarities and differences. Three of these proposals would establish a carbon tax (or “carbon fee”), and one would establish a cap-and-trade program (or “cap-and-invest program”).

They are:

• the Energy Innovation and Carbon Dividend Act of 2023 (H.R. 5744) introduced by Rep. Salud Carbajal (D-Calif.) on September 27, 2023
• the Modernizing America with Rebuilding to Kickstart the Economy of the Twenty-first Century with a Historic Infrastructure-Centered Expansion Act of 2023 (MARKET CHOICE Act, H.R. 6665) introduced by Reps. Brian Fitzpatrick (R-Pa.) and Salud Carbajal (D-Calif.) on December 7, 2023
• Climate Pollution Standard and Community Investment Act of 2023 (H.R. 9230) introduced by Rep. Paul Tonko (D-N.Y.) on July 30, 2024
• the America’s Clean Future Fund Act (S. 5107) introduced by Sen. Dick Durbin (D-Ill.) on September 19, 2024