State Actions

The two large pricing schemes currently in force in the U.S. include California’s cap and trade system and the Regional Greenhouse Gas Initiative (RGGI) – a cap and trade system on power plants across nine northeastern and mid-Atlantic U.S. states. California’s cap and trade is a key element for them to reach their emission reduction goals.  Washington state’s Clean Air Rule, September, 2016, instituted what is essentially cap and trade on large stationary emission sources, but elements of the rule are still in litigation.

Several states currently have some sort of carbon pricing proposal and/or have some sort of push underway. Proposed legislation for some form of price on carbon were accelerating, with a plethora of legislative proposals in 2018-19, but efforts have slacked off a bit in 2020. Overall cap and trade is growing, but carbon tax seems to be a hard sell.

Northeastern and Mid-Atlantic U.S.

Carbon pricing policies are existing or being considered in . The New England efforts are loosely coordinated by the National Caucus of Environmental Legislators (NCEL).

The Regional Greenhouse Gas Initiative (RGGI) is a cap and trade system on power plants for nine northeastern states. RGGI’s cap was initially set too high (2009) but was later readjusted and to date RGGI is functioning well. Recently, New Jersey rejoined and Pennsylvania joined RGGI.

The Transportation and Climate Initiative (TCI) is a consortium of twelve states and the District of Columbia. At the end of 2018, nine of the states agreed to develop a framework that caps the region’s overall transportation emissions and trades in a system modeled after RGGI.

Midwestern U.S.

The first (and only) midwestern state to propose carbon pricing (so far) is Minnesota, with legislation introduced May 2018. It didn’t pass.

Western U.S.

The three Pacific Coast states of California, Oregon and Washington have or have considered carbon pricing. California has cap and trade and is in a trading market with Quebec, governed by the Western Climate Initiative (WCI). There is the possibility that Oregon and Washington could join the WCI if cap and trade is approved. Utah entered the fray in 2017 with a proposal for a carbon tax. Colorado, Montana and New Mexico have made approaches to the problem and Hawaii has proposed a modest carbon tax.

For a compilation of climate change legislation passed by states see the Digital Environmental Legislative Handbook. For an excellent summary and updates on carbon pricing legislation see state information on the NCEL website.

See also History of U.S. Federal Carbon Pricing Legislation

Last updated March 8, 2020