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.
Regulations are rules implemented by a federal agency within the Executive branch. After a lengthy process of development, public comment, and review, these regulations are codified in the Code of Federal Regulations and have the force of law.
Regulations can be quite significant policies in terms of their ability to reduce greenhouse gas emissions. However, the authority of these agencies to implement these regulations is ultimately delegated by Congress to these agencies through enabling legislation such as the Clean Air Act, the Clean Water Act, or the Safe Drinking Water Act. Exactly what authority and with what scope is delegated by Congress to the Executive is frequently litigated in court. This can significantly delay implementation of regulations. Changes in which party holds the Presidency can also significantly delay implementation of regulations, even after the courts have clarified the scope of authority. This is due to the divergent positions on the role of regulations in our society held by the parties, and the significant authority a new administration possesses to determine the direction of the agencies, especially for regulations finalized in the last 6 months of the previous administration.