Carbon pricing schemes generally fall into two categories: cap and trade systems and carbon taxes. Revenue-positive pricing schemes accrue new revenue for the state, province or nation which can be reinvested in renewable energy development or other programs or funds.
Several state legislatures in the US are now considering carbon pricing systems, while other states are considering setting up study commissions to better understand the potential economic and policy impacts of carbon pricing.
Carbon trading systems set a cap on the allowable Greenhouse Gas (GHG) emissions in a jurisdiction and then distribute permits that can be purchased and traded among emitters. Cap and trade systems use market forces to determine the price of the GHG emissions.
Nine states in the Northeastern US are part of the Regional Greenhouse Gas Initiative (RGGI) which was put in place in 2009. California established its own cap and trade system in 2006 that also allows emitters subject to the system to comply by supporting carbon mitigation projects in other states.
In 2018, Sealaska Corporation was issued 11 million carbon credit offsets by the California Air Resources Board to set aside 165,000 forested acres for use as a carbon bank for 100 years. Other Alaska Native Corporations are working on similar mitigation projects as well.
In 2008, British Columbia established a revenue neutral carbon tax that is rebated back to the citizens of the province through income and business tax cuts and a low-income tax credit. There is also a carbon fee-and-dividend proposals currently being discussed in U.S. Congress.
In 2018, Sealaska Corporation was issued 11 million carbon credit offsets to set aside 165,000 forested acres for use as a carbon bank for 100 years.