Carbon Pollution Pricing
Carbon pricing is a market-based mechanism that aims to reduce the amount of greenhouse gases (GHGs) emitted by imposing a fee or a cap on carbon dioxide emissions. Regulated entities can either reduce emissions and stay under the cap, or continue emitting and pay more. The revenue generated from these polluter fees are often reinvested in communities facing the brunt of environmental and climate harms. This policy intervention aims to shift the cost of harmful pollution to emitters, rather than the public, based on the social cost of carbon.
There are various forms of carbon pricing. One common form is through an emissions trading system (ETS) such as cap-and-trade, which establishes an upper limit (“cap”) on total emissions, and then divides this cap into emissions permits or credits that are distributed to all regulated entities, either for free or through an auction. Those that reduce their emissions can trade any unused credits on the carbon market; emitters who do not reduce their emissions enough can then buy those unused emissions credits, and emissions in the overall ETS stay below the established cap. Another form is through a carbon tax, which directly prices carbon through a specific tax rate per ton of emissions. A carbon tax relies on emitters changing their behavior to avoid incurring increased costs from emissions.
Key Resources
States with Statutory Greenhouse Gas Reduction and Reporting Requirements
Environmental Justice and Carbon Pricing: Can They Be Reconciled?
Carbon Pricing Explainer Series
Carbon Pricing
Model States
California
California's Cap-and-Trade Program covers the electricity, buildings, transportation, and industrial sectors, covering around 80% of state emissions.
Massachusetts
The Regional Greenhouse Gas Initiative (RGGI) covers the electricity sector.
New York
The Regional Greenhouse Gas Initiative (RGGI) covers the electricity sector.
The state is also developing an economywide cap-and-invest program, with draft rules expected in 2025 and implementation beginning in 2026.
Washington
Washington's Cap-and-Invest Program covers the electricity, buildings, transportation, and industrial sectors, covering around 75% of state emissions.
Carbon Pollution Pricing By State
Status | State Sort descending | Region | Components | YR Enacted | |
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Not Enacted |
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Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Southeast | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
West | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Southwest | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Southeast | |||
Enacted |
Empty column
California's Cap-and-Trade Program covers the electricity, buildings, transportation, and industrial sectors, covering around 80% of state emissions. Establishing Policies
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|
West | 2012 | ||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
West | |||
Enacted |
Empty column
The Regional Greenhouse Gas Initiative (RGGI) covers the electricity sector. Establishing Policies
Empty column
|
Northeast | 2005 | ||
Enacted |
Empty column
The Regional Greenhouse Gas Initiative (RGGI) covers the electricity sector. Establishing Policies
Empty column
|
Southeast | 2005 | ||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Southeast | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Southeast | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
West | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
West | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Midwest | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Midwest | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Midwest | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Midwest | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Southeast | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Southeast | |||
Enacted |
Empty column
The Regional Greenhouse Gas Initiative (RGGI) covers the electricity sector. Establishing Policies
Empty column
|
Northeast | 2005 | ||
Enacted |
Empty column
The Regional Greenhouse Gas Initiative (RGGI) covers the electricity sector. Establishing Policies
Empty column
|
Southeast | 2007 | ||
Enacted |
Empty column
The Regional Greenhouse Gas Initiative (RGGI) covers the electricity sector. Establishing Policies
Empty column
|
Northeast | 2007 | ||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Midwest | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Midwest | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Southeast | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Midwest | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
West | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Midwest | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
West | |||
Enacted |
Empty column
The Regional Greenhouse Gas Initiative (RGGI) covers the electricity sector. Establishing Policies
Empty column
|
Northeast | 2005 | ||
Enacted |
Empty column
The Regional Greenhouse Gas Initiative (RGGI) covers the electricity sector. Establishing Policies
Empty column
|
Northeast | 2020 | ||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Southwest | |||
Enacted |
Empty column
The Regional Greenhouse Gas Initiative (RGGI) covers the electricity sector. The state is also developing an economywide cap-and-invest program, with draft rules expected in 2025 and implementation beginning in 2026. Establishing Policies
Empty column
|
Northeast | 2005 | ||
Not Enacted |
Empty column
The 2023 budget included language that prohibits the governor and state agencies from requiring electric utilities to join a cap-and-trade program. Empty column
|
Southeast | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Midwest | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Establishing Policies
Empty column
|
Midwest | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Southwest | |||
Enacted |
Empty column
The Climate Protection Program sets an enforceable declining cap on greenhouse gas emissions from fossil fuels used throughout Oregon, including diesel, gasoline, and natural gas. The program is designed to reduce these emissions by 50% by 2035 and 90% by 2050. Establishing Policies
Empty column
|
West | 2024 | ||
Not Enacted |
Empty column
Pennsylvania developed a regulation in 2022 to participate in the Regional Greenhouse Gas Initiative (RGGI), which is a cap-and-trade program that covers the electricity sector. In July 2022, the Commonwealth Court of Pennsylvania halted the state’s participation while there are ongoing lawsuits regarding the regulation, and in November 2023, ruled that RGGI participation violates the state constitution. Establishing Policies
Empty column
|
Northeast | |||
Enacted |
Empty column
The Regional Greenhouse Gas Initiative (RGGI) covers the electricity sector. Establishing Policies
Empty column
|
Northeast | 2007 | ||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Southeast | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Midwest | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Southeast | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Southwest | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
West | |||
Enacted |
Empty column
The Regional Greenhouse Gas Initiative (RGGI) covers the electricity sector. Establishing Policies
Empty column
|
Northeast | 2005 | ||
In-Progress |
Empty column
The Clean Energy and Community Flood Preparedness Act authorized Virginia to join the Regional Greenhouse Gas Initative, a cap-and-trade program that covers the electricity sector. Virginia was a participating state from 2021-2023. In June 2023, the Air Pollution Control Board voted to advance Governor Youngkin's proposal to withdraw from RGGI. In November 2024, a judge ruled that Virginia can’t withdraw from RGGI without the state legislature’s authorization. The ruling stated the state’s Air Pollution Control Board exceeded its authority when it voted to exit the program. Establishing Policies
Empty column
|
Southeast | |||
Enacted |
Empty column
Washington's Cap-and-Invest Program covers the electricity, buildings, transportation, and industrial sectors, covering around 75% of state emissions. Establishing Policies
Empty column
|
West | 2023 | ||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Southeast | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
Midwest | |||
Not Enacted |
Empty column
Carbon pollution pricing establishes a pollution fee or cap-and-trade program on the greenhouse gas emissions associated with each sector/source of emissions within the state. Programs typically cover the electricity, buildings, transportation, and/or industrial sectors. Empty column
|
West |