Focal Areas

Pricing Carbon

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Carbon pricing is an efficient, market-based method for reducing emissions. As of 2017, 40 nations have implemented a carbon tax or trading system. In the U.S., at least two states will join or link to the Regional Greenhouse Gas Initiative in 2018, expanding that utility-sector trading regime to 11 states. Between RGGI and California’s economy-wide program, nearly one-third of all Americans live in a state with a carbon price. 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 under the Clean Air Act. And with faculty partners at Duke University, Institute staff study methods for calculating the Social Cost of Carbon for use in carbon markets or traditional regulation.