University of San Diego

San Diego Journal of Climate & Energy Law


Nancy Shurtz


In the absence of effective international and federal initiatives to combat the impacts of global climate change, many state, local and regional jurisdictions are passing or proposing measures to curb carbon dioxide (CO2) emissions. The province of British Columbia, Canada, as well as the cities of San Francisco, California and Boulder, Colorado have carbon taxes in place, and similar actions have been proposed in the Oregon and Washington state legislatures. The state of California and the province of Québec have linked together in a joint cap-and-trade system. This Article will examine the fundaments of carbon taxation, including identification of the tax base (the pollutant) and taxpayer (consumer, manufacturer, etc.), rates of taxation, measurement standards for tax assessment, exemptions, and use of revenue, and then compare them to cap-and-trade systems. It will assess this family of market initiatives based on the following criteria: (1) administerability, (2) political feasibility, (3) revenue generation, (4) efficiency, (5) equity, and (6) efficacy. Lastly, the Article considers the constitutional, practical, and political challenges to reform. The Article concludes that all states and provinces in North America should link together in a strict cap and-trade system while local jurisdictions within the region should pass broad-based carbon taxes. Any revenue generated from these market mechanisms can be recycled to low-income taxpayers and used for carbon sequestration and other “green” purposes. Although the urgency for binding law on a national and international scale is apparent but not immediately forthcoming, regional, state and municipal initiatives can serve as blueprints for innovative and effective climate policy change.