Carbon Pricing causes an immediate price rise, seen as a threat by senators from high fossil fuel states

Varying forms of carbon pricing have been aggressively promoted by advocates in every international climate deliberation from Kyoto to Paris. Much of the voluminous academic literature on climate change has assumed that its widespread adoption was inevitable. However, compelling ideas from economics do not necessarily suspend the laws of politics. Carbon pricing presumes that politicians are willing and able to make the case for sustained increases in the price of commodities that are familiar and essential in everyday life. It further assumes that the public will rally to the cause.

In practice, carbon pricing adoption remains one of the heaviest political lifts anywhere in the world. Since the 1997 Kyoto agreement, the rate of non-symbolic carbon price adoption has been rather modest. And carbon taxes and cap-and-trade are among the most likely climate policies to be reversed after they have been launched.

In the United States, the political path forward is challenging at best. The U.S. House Climate Solutions Caucus nears triple digits in membership but a great many of its Democratic and Republican members get fuzzy on policy particulars, often embracing broad renewable energy goals rather than some form of carbon price. Even after last year’s multi-state declaration of fealty to meeting Paris emission reduction goals with aggressive bottom-up innovation, the actual adoption of state carbon pricing policies remains quite modest and confined to coastal states.

For states that produce considerable amounts of fossil fuels, any elevated price is likely to be perceived as a direct political threat to their well-being. For vehicle manufacturers, profits are greatest on trucks and cars with the lowest fuel-efficiency. Even college and university presidents, among our nation’s most active supporters of ambitious climate mitigation, rarely consider internal carbon pricing. Instead, campus climate action plans routinely favor more costly but more politically palatable options.

Carbon pricing thus faces some sobering political hurdles in any setting. Proponents must make a convincing case that the public should support immediate pocketbook sacrifices for benefits that may be difficult to measure and allocated primarily to future generations that they will never meet. That is not an easy sell in any circumstance.