While carbon pricing is the primary focus of the Pricing Carbon Initiative, we and many of our regular participants are also interested in multiple policy approaches to addressing climate change, including incentives and regulations. In our view, the three complement each other.
Incentives are subsidies, tax breaks, prizes, or investments. Incentives have tended to be less politically controversial than either carbon prices or regulations. For instance, the Infrastructure Investment and Jobs Act of 2021 was a bipartisan piece of legislation that included a great many incentives for climate action.
Though it was passed along a pure party-line vote, the Inflation Reduction Act is also a major piece of legislation that must be mentioned when discussing incentives. With $369 Billion in spending, plus an additional $250 billion in research and development authorized for the Department of Energy, this is the largest investment in climate the United States has ever made.