Carbon pricing comes in two main flavors: a carbon tax (fixed price per ton of CO2-equivalent) and cap-and-trade (fixed quantity of permits). Most economists, across the political spectrum, favor carbon pricing as the most economically efficient way to reduce emissions.
The Climate Leadership Council has proposed a "carbon dividend": a rising carbon tax with all revenue returned to households as equal per-capita rebates. The Energy Innovation and Carbon Dividend Act has had bipartisan sponsorship.
Despite economist support, carbon pricing has not passed Congress. The Inflation Reduction Act (2022) instead used subsidies and tax credits — politically easier but less economically efficient.
Critics on the left argue pricing is too slow and regressive without strong rebates; critics on the right argue any tax raises consumer costs and harms competitiveness.