Carbon emissions can be reduced by instituting economic policies, such as a carbon tax, or by cap and trade/dividend policies. Some programs in the US and Canada and the US House Select Committee on the Climate Crisis 2020 plan are noted below.
- Among Canadian provinces, British Columbia instituted one of the earlies carbon taxes or fees in 2007, which is currently $ 40/Mt CO2e, increasing by $ 5/year to $ 50 (2020 increase was postponed due to COVID-19). BC's GDP grew 17 % between 2007-2015 and emissions dropped 4.7 %.
- California’s emissions trading system was formed in 2013 with a target of 16 % reduction in greenhouse gas emissions between 2013 and 2020 and an additional 40 percent by 2030 (see the state's legislation since 2006).
- Northeastern US states formed the Regional Greenhouse Gas Initiative (RGGI) in 2014, a market-based program to reduce greenhouse gas emissions by capping and reducing CO2 emissions from the power sector, from 82.6 MMt initial CO2 cap declining 2.5 percent each year.
- Washington State's goal since 2008 has been reducing greenhouse gas emissions, and rules to establish and reduce emissions were instituted starting in 2017; however, a second referendum on a carbon tax failed in 2018.
- The 2020 Climate Crisis Action Plan from the House Select Committee on the Climate Crisis supports putting a price on carbon pollution. In the report, they write that at present no one pays for the loss of life and property damage caused by wildfires, stronger hurricanes, and other extreme weather events resulting from environmental and societal costs of greenhouse gas emissions from the burning of fossil fuels. Industry, investors, and consumers do not internalize the true cost of the choices they are making and have less incentive to choose less-polluting products or technologies. The market should reflects the true cost of carbon pollution, to rectify the bias in the the U.S. economy toward fossil fuel combustion. They advocate putting a price on each ton of pollution which “percolates through the entire economy, providing an incentive for all decision makers in the economy to look for ways to reduce emissions".