Jan 22, 2021 - Politics & Policy

Yellen says Biden is "fully supportive" of carbon pricing


Photo: Alex Wong/Getty Images

Janet Yellen, President Biden's nominee to run the Treasury Department, has made clear to senators that her boss supports carbon pricing, but how that backing translates to policy is unknown.

Driving the news: "I am fully supportive of effective carbon pricing and I know that the President is as well," Yellen said in written answers to Senate Finance Committee members' questions published Thursday.

  • "We cannot solve the climate crisis without effective carbon pricing," she wrote.
  • "The President does support an enforcement mechanism that requires polluters to bear the full cost of the carbon pollution they are emitting."

What we don't know: What that "enforcement mechanism" might mean. Carbon pricing typically refers to taxes or emissions trading systems.

Background: Yellen is on record supporting a proposal that would tax emissions and then return revenues to the public. But carbon taxes have little political traction on Capitol Hill, and emissions trading systems are a heavy lift in Congress, too.

  • Most Republicans don't like them, while Democrats and many activists are putting a higher priority on other climate policy ideas.

The intrigue: There could be some avenues that don't require Congress (but would likely face litigation).

  • The Obama-era Clean Power Plan to cut power plant emissions gave states the option of using CO2 trading to meet their requirements.
  • But the overall rule never took effect due to a Supreme Court stay.

What to watch: Yellen said she'll continue discussing her views with Biden and other people in the administration.

Go deeper