Introducing a PLOS Climate Mini Collection on Carbon Pricing

PLOS Climate Academic Editor Malcolm Fairbrother is a Professor of Sociology at Umeå University (Sweden), the Institute for Futures Studies (Stockholm), and University of Graz (Austria).

Twitter: @malcolmfair

Environmental problems of any kind arise from misaligned incentives: people pollute because they can shift the costs of their actions onto others (Fairbrother 2016). Consequently, increasing the price of polluting to the polluter is often a powerful way of addressing such problems. In the case of climate change, evidence suggests that policies for raising the price of greenhouse gas emissions to emitters have generally succeeded in mitigating such pollution (e.g., Ellerman et al. 2020; Fairbrother and Rhodes 2023).

At the same time, and despite the economic cost-effectiveness of such policies, the politics of carbon pricing have proven challenging. Though dozens of countries, regions, and sub-national jurisdictions have some kind of carbon price policy, collectively these systems do not cover even one-quarter of the world’s total emissions, according to the World Bank’s Carbon Pricing Dashboard. Even some researchers and advocates who believe in the benefits of carbon pricing in principle have thus largely given up on carbon pricing in practice (Jaccard 2020; Stokes and Mildenberger 2020). There are reasons to think that the politics of alternative means of reducing greenhouse gas emissions may be more promising (Meckling et al. 2016).

With that in mind, the papers in this Mini Collection each grapple, in some way, with the political impediments to the introduction of policies for carbon pricing. All the papers are products of a collaboration among a group of sociologists who came together specifically with the purpose of identifying and helping to implement solutions to the problem of climate change. This collaboration was an initiative of the author of two of the papers in this Mini Collection, Monica Prasad, who has encouraged sociologists to do more research aimed at solving important social problems–even if, as in the case of climate change, the solutions require overcoming opposition by some very powerful forces in society (Prasad 2021). Detailed case studies of greenhouse gas pricing initiatives, and other climate policy efforts more broadly, can yield insights into the conditions under which such initiatives are more or less likely to succeed, and how advocates can maximize their chances. Why and how have some countries/regions succeeded in establishing such programs, while others have failed, and what can we learn from their experiences?

The group focused on carbon taxes, cap-and-trade schemes, and taxes applicable to any combination of greenhouse gases–and the questions of what are the *limits* of what such policies can accomplish, whether such instruments risk being ineffective, and what existing analyses are missing. At the time of writing, such questions are especially pressing for example in Europe, where the EU is in the process of establishing a vast new carbon market for buildings and road transport. That said, the papers in the Mini Collection focus empirically on the U.S. It is worth noting that they were written before the passage of last year’s Inflation Reduction Act (IRA), which provided for a huge amount of investment in green technologies, but specifically did not impose any kind of price on greenhouse gas emissions. The substance of the IRA suggests that the U.S. is not a promising place to go looking for signs of carbon pricing… which makes the papers in the Mini Collection all the more intriguing, as they in fact point to ways in which even in the U.S. the cause of carbon pricing is not lost.

The first paper by Prasad provides a commentary on the current state of discussions about carbon pricing. Prasad endorses carbon taxes, but also notes that such taxes come with a sting in the tail: the more effective they are, the more the revenues they generate will decline over time. As new technologies emerge, and polluting activities are displaced, there are fewer tonnes of greenhouse gas emissions to tax, which presents a risk to vital public revenues. More positively, Prasad also argues that many studies of the costs and benefits of carbon taxes have given surprisingly little attention to avoided damages and climate benefits. That is, for various reasons she identifies, the most important benefits of carbon taxes tend to get downplayed, while the costs are made abundantly clear.

The paper by Karceski asks what we can learn from the experience of Washington State, where two different ballot initiatives sought to establish a state carbon tax. As Karceski explains, politically, and in terms of its energy system, Washington State seems as likely as anywhere in the U.S. to embrace such a measure. Among other things, the state has no fossil fuel production, such that the kinds of organized interests that have blocked efforts elsewhere are absent. Nevertheless, both initiatives failed, for reasons Karceski explores. Among other things, he argues that the state’s existing tax structure presented a challenge. And, echoing one of Prasad’s warnings, Karceski notes that the threat of lost public revenues was a key argument made by the initiative’s opponents.

The second of the two papers by Prasad reviews the history and impacts of the “public benefit funds” in 22 American states (plus Puerto Rico and the District of Columbia). She argues that in important respects these little-known charges for energy use are equivalent to carbon taxes, and expanding them could be a promising way of reducing U.S. emissions. As she notes, public benefit funds are surprisingly unpoliticized. 

Finally, a review paper by me synthesizes what we know about public attitudes towards both price-based and other climate policies. There is a growing and helpful literature on such attitudes, though we urgently need more studies comparing attitudes towards a wider range of policies. In particular, we know very little about public views of many important actions governments will need to take in the years to come, if humanity is to decarbonize large and difficult sectors such as transportation, buildings, and agriculture. We also lack perspective on the outlooks of residents of many countries beyond the Global North.

References

Ellerman, A. Denny, Claudio Marcantonini, and Aleksandar Zaklan. 2016. “The European Union Emissions Trading System: Ten Years and Counting.” Review of Environmental Economics and Policy 10: 89-107. [paywall]

Fairbrother, Malcolm, and Ekaterina Rhodes. 2023. “Climate policy in British Columbia: An unexpected journey.” Frontiers in Climate 4: 1043672.

Fairbrother, Malcolm. 2016. “Externalities: why environmental sociology should bring them in.” Environmental Sociology 2: 375-384.

Jaccard, Mark. 2020. The Citizen’s Guide to Climate Success: Overcoming Myths that Hinder Progress. New York: Cambridge University Press.

Meckling, Jonas, Nina Kelsey, Eric Biber, and John Zysman. 2016. “Winning Coalitions for Climate Policy: How Industrial Policy Builds Support for Carbon Regulation.” Science 349: 1170-1171. [paywall]

Prasad, Monica. 2021. Problem-Solving Sociology: A Guide for Students. Oxford University Press.

Stokes, Leah C., and Matto Mildenberger. 2020. “The Trouble with Carbon Pricing.” Boston Review. September 24. https://www.bostonreview.net/articles/leah-c-stokes-matto-mildenberger-tk/