carbon pricing

Key Insights from a Solutions Forum on Carbon Pricing and Clean Power

Key Insights from a Solutions Forum on Carbon Pricing and Clean Power

April 2015

Download the Key Insights (PDF)


States will have tremendous flexibility to choose how to reduce carbon emissions under the Clean Power Plan. One idea states are exploring is putting a price on carbon. The first C2ES Solutions Forum — held on April 15, 2015 — brought together legal and economic experts, state environmental directors, and business leaders to explore the potential use of market mechanisms to reduce these damaging emissions efficiently and cost-effectively.

For more information about the C2ES Solutions Forum, see:

Key insights and highlights from the event on carbon pricing and clean power include:

  • Most economists agree that the most efficient way to address climate change is to put a price on carbon.
  • The U.S. Environmental Protection Agency (EPA) has given states tremendous flexibility to determine the best way to achieve emission targets.
  • Virtually every state is already engaged in some activity that reduces emissions.
  • Market-based options available under the proposed Clean Power Plan go beyond creating or joining a cap-and-trade program or instituting a carbon tax.
  • States and businesses generally agree that market mechanisms are a proven, least-cost way to reduce emissions.
  • States believe support from the business community will be essential to adopting market-based options.
  • State and business leaders recognize the need to talk to one another about the best way to reduce emissions.
  • States are concerned about having enough time to develop market-based policies.
  • State and company representatives see a role for EPA to help states after the Clean Power Plan is finalized. 

C2ES will continue the conversation with states and businesses to share insights and innovative ideas that will help us get to a clean energy future. Our second Solutions Forum on May 18 will explore improving energy efficiency, which reduces emissions, through information and communication technologies. Our third event on June 25 will examine how to finance clean energy technology and infrastructure.

Jason Ye

Taking action on climate change is good business strategy

A new C2ES report highlights lessons useful for companies and policymakers as more states and countries consider carbon pricing to spur innovative technologies and cut emissions at the lowest possible cost.

The report, written for the World Bank’s Partnership for Market Readiness (PMR), examines how three companies — Pacific Gas and Electric (PG&E), Rio Tinto, and Royal Dutch Shell -- prepared for carbon pricing programs.

The PMR shares this type of information with developing countries to help them create their own market-based policies. We were pleased to partner with the PMR to explore how a few of the companies in our Business Environmental Leadership Council prepared for carbon pricing and we thank the companies for sharing their expertise.

The lessons they shared fall into two categories – what business can learn from other companies operating in carbon markets and what governments considering market-based climate policy can learn from business.

Pricing carbon - What are the options?

Judging from the climate policy debate in Washington, one might conclude that carbon pricing is only a concept, or something being tried in Europe.

But in fact, 10 U.S. states (California and the Northeast states in the Regional Greenhouse Gas Initiative) have carbon trading programs. That means more than a quarter of the U.S. population lives in a state with a price on carbon. And a growing number of nations and provinces around the globe are turning to carbon pricing to cost-effectively reduce greenhouse gas emissions and encourage energy innovation.

Over the years, C2ES has closely examined the many ways available to price carbon, including a cap-and-trade system, an emissions tax, and a clean energy standard with tradable credits.

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