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The coal-fired Brandon Shores Power Plant in Baltimore, Maryland. Photo: Mark Wilson/Getty Images

Although Washington state’s proposed carbon tax failed at the ballot box, carbon pricing remains one of the best policy solutions to mitigate the effects of climate changes as the window to keep global warming below 1.5°C continues to narrow.

The big picture: There are stark trade-offs to both a carbon tax, under which companies pay for each ton they emit, and a cap-and-trade system, which requires them to buy permits for emissions. However, a hybrid model could be the sweet spot between practical politics and effective policy.

Details: Both would reduce carbon emissions, but with distinct disadvantages:

  • A carbon tax, often favored by conservatives because it is easier for businesses to plan for, nevertheless carries heavy political risk. Opponents outspent supporters two-to-one in Washington state, reflecting the inherent difficulty of passing new taxes and the added force of lobbying by the fossil fuel industry.
  • A cap-and-trade approach, generally preferred by national environmental groups, presents high cost uncertainty for politicians: Too few permits could lead to high prices and economic disruptions. Policymakers typically err on the side of leniency, creating an oversupply of permits at insufficient prices and prompting industry to criticize any adjustments as unfair changes to market rules.

A hybrid approach, on the other hand, could reduce emissions through declining caps while ruling out price extremes via ceilings and floors on permit prices.

  • Should permit prices reach the ceiling, the government would bring down prices by auctioning off more permits. Meanwhile, a price floor ensures stable prices even if faster-than-expected emission reductions produce a surplus of permits.
  • A price floor of $40 per ton, as proposed by Republicans James Baker and George Shultz, would be a good starting point. (The World Bank recommends a carbon price of $40-$80 per ton by 2020).

While carbon pricing is a powerful tool, it leaves behind substantial cost effective reductions that are unresponsive to pricing carbon. Using the revenue it generates to underwrite the transition to clean energy can address this gap — though policymakers have sometimes taken a “revenue neutral” approach, returning revenue to people or businesses either through tax cuts or a check.

Why it matters: Scientists are confident that carbon pricing is an essential, efficient way to slow climate change. Demographic trends favor it as well, with millennials supporting climate action at much higher rates than older generations.

Chris Busch is the director of research at Energy Innovation.

Go deeper

2 hours ago - World

U.S. will give Russians written response to NATO demands, Blinken says

Blinken and Lavrov shake hands in Geneva. Photo: Russian Foreign Ministry / Handout/Anadolu Agency via Getty Images

Secretary of State Antony Blinken confirmed after a meeting with his Russian counterpart on Friday that the U.S. will provide written answers to Russia's security demands next week.

Why it matters: Russia claims to be waiting for "concrete answers" to its demands that NATO rule out further expansion and roll back its presence in eastern Europe before deciding its next steps on Ukraine. But the U.S. and NATO have called those proposals "non-starters," and Friday's meeting offered no breakthroughs, so it's unclear how written answers might change the equation.

More surprises await scientists at Antarctica's "Doomsday Glacier"

Cliffs along the edge of the Thwaites Ice Shelf in West Antarctica. Photo: James Yungel/NASA

Researchers like David Holland, an atmospheric scientist at New York University, are in a race to understand the fate of a massive glacier in West Antarctica that has earned a disquieting nickname: "The Doomsday Glacier."

Why it matters: Studies show the Thwaites Glacier (its official name) could already be on an irreversible course to melt during the next several decades to centuries, freeing up enough inland ice to raise global sea levels by at least several feet.

Updated 4 hours ago - Health

The case for Operation Warp Speed 2.0

Illustration: Annelise Capossela/Axios

Omicron's blitz around the world has underscored the need for a new arsenal of COVID vaccines and therapeutics, experts say — and that may require an effort akin to Operation Warp Speed 2.0.

Why it matters: The virus will continue to evolve, potentially in a way that further escapes vaccine protection, and the best way to prevent more global disruptions to everyday life is to have tools ready to combat whatever comes next.