Emission Sources Included
Ideally, to control carbon emission using a price on carbon, all emission sources should be included. The primary emission sources in the U.S. in 2012 as plotted by the EPA are shown in the illustration on the right.
The three primary sources are electricity generation, transportation and industrial. Some pricing schemes, like the Regional Greenhouse Gas Initiative (RGGI), in effect in nine northeastern U.S. states, is only on power generation which covers 20% of total emissions; by contrast, the California cap and trade extended in 2015 into transportation and covers 85% of emissions. Most global pricing schemes include power generation and industrial, but only a few include transportation (California, Quebec, New Zealand, Kazakhstan, and Shanghai). Percentage of emissions covered by a carbon pricing scheme in each geographic entity is shown below.
Most schemes cover in the range of 30-40% of emissions where they apply. To be most effective in modifying behaviors and business, the proportion of emissions covered needs to be much closer to 100%.
According to the World Bank, total emissions covered by all the pricing schemes shown is ~6 Gt CO2e, or about 12% of annual global GHG emissions.