Abstract
Carbon pricing is a key policy instrument used to steer markets towards the adoption of low-carbon technologies. In the last two decades, several carbon pricing policies have been implemented or debated at the state and federal levels in the US. The Regional Greenhouse Gas Initiative and the California cap-and-trade policy are the two regional policies operational today. While there is no federal policy operational today, several carbon pricing proposals have been introduced in Congress in the last decade. Using the literature on interest group politics and policy entrepreneurship, this article examines the carbon pricing policies at the subnational and federal levels in the US. First, the article explores the evolution of two main regional carbon pricing policies, the Regional Greenhouse Gas Initiative and California cap-and-trade, to identify how interest groups and policy entrepreneurs shaped the design and implementation of the respective policies. Second, the article details the federal carbon pricing policy proposals and bills discussed in the last decade. Third, it examines the factors that limit the prospects of realizing an ambitious federal carbon price for pursuing deep decarbonization of the US economy. The article finds that federal carbon pricing in the US suffers from the lack of any natural and/or consistent constituency to support it through policy development, legislation, and implementation. While interest group politics have been mitigated by good policy entrepreneurship at the subnational level, the lack of policy entrepreneurship and the changing positions of competing interest groups have kept a federal carbon pricing policy from becoming a reality.
Highlights
Since the establishment of the United Nations Framework Convention on Climate Change in 1992, many countries have implemented climate mitigation policies to promote the innovation, production, and con‐ sumption of clean energy technologies
Prospects of an ambitious federal carbon pricing pol‐ icy in the US appear bleak, given the contestations among industry groups and environmental organizations, the politicization of climate change, and public opin‐ ion strongly divided along partisan lines (Bryant, 2016; Nowlin et al, 2020)
The urgent need to pursue deep decarbonization and reach net‐zero greenhouse gas (GHG) emissions by mid‐century makes it unlikely that relying primarily on carbon pricing policies is a good strategy for climate advo‐ cates (Tvinnereim & Mehling, 2018)
Summary
Since the establishment of the United Nations Framework Convention on Climate Change in 1992, many countries have implemented climate mitigation policies to promote the innovation, production, and con‐ sumption of clean energy technologies. The mere existence of a carbon price is being used as an excuse by fossil‐fuel‐ based business interests to remove other regulatory and fiscal policies that play a crucial role in decarbonizing an economy (Markard & Rosenbloom, 2020) In this context, the article discusses how interest groups and policy entrepreneurs shape the likelihood and stringency of a carbon pricing policy, with exam‐ ples drawn from the US experience. The article explores how the alignment or misalignment among business and environmental interest groups, and the extent or lack of policy entrepreneurship, shapes the likelihood of implementing a new carbon pricing policy or increas‐ ing the stringency of an existing carbon pricing pol‐ icy at the federal and state level in the US This arti‐ cle first provides an overview of how interest groups and policy entrepreneurs shaped the two most estab‐ lished subnational carbon pricing systems, the California cap‐and‐trade program, and the US Northeast Regional Greenhouse Gas Initiative (RGGI). The article discusses the prospects for a federal carbon pricing policy under the current Biden administra‐ tion and for deep decarbonization of the US economy
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