Building Political Support for Carbon Pricing /

It is important to note that despite growing interest in carbon taxes, cap and trade programs remain the most common form of carbon pricing in the world today: according to the World Bank, approximately 2 Gt of emissions (CO2e) were covered by a carbon tax generating approximately $25 Bn in revenue, whereas 5 Gt (CO2e) were covered by emissions trading programs generating approximately $56 Bn in r [...] In addition, most emissions trading programs now auction a majority of their allowances to emitters, thereby providing opportunities to use carbon pricing revenue in ways that can benefit the public and increase political support. [...] For this reason, it is important for policy designers to recognize the diversity of public benefits that have been important in different policy contexts in promoting the political durability of carbon pricing policies, whether a carbon tax or cap and trade design. [...] System (EU ETS) For example, the Regional Greenhouse Gas Initiative (RGGI), which was the first major carbon pricing policy in the U. S., created and promoted tangible “consumer benefits” through investments in energy efficiency and other programs to lower consumers’ energy bills. [...] In California, for example, one of the world’s first “carbon dividends” was delivered as a credit on electricity bills as a consumer benefit to increase public approval, even as the policy also invested significant revenue in improving local public health.