As climate change policy takes shape, will the U.S. ever put a price on carbon?

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4 years ago

November 15, 2021

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A ConocoPhillips refinery in Wilmington, California.

Jonathan Alcorn | Bloomberg | Getty Images

The world needs to reduce carbon levels, and one way is through a carbon tax, a strategy the U.S. has been debating for decades.

With urgent calls to lower greenhouse gas emissions globally, putting a price on carbon was one of the major points of discussion among world leaders at the COP26 conference in Glasgow earlier this month. Consensus on a global carbon price is growing, according to Lord Greg Barker, executive chairman at EN+ and co-chair of the Carbon Pricing Leadership Coalition.

“We need countries to come together to agree on international standards in order to make that big shift to the low carbon economy,” Barker told CNBC in an interview from COP26 last week. ”It would be much better for the world if there was a common carbon price.”

As of now, Barker says there are 69 countries with a carbon price ranging from $1 to $139 per metric ton. The U.S. is not one of them.

Barker told CNBC most economists agree that carbon pricing is the most effective tool there is to transition to a low carbon economy. Carbon pricing shifts the liability for the consequences of climate change to the polluters who are responsible, according to the World Bank.

The Biden administration has outlined $555 billion in spending to confront climate change, though the plan does not address carbon pricing. The bill does include a proposed methane fee incentivizing oil and gas companies to reduce their methane emissions.

A policy to apply a carbon tax was considered as a “plan B” during negotiations over the current climate package, according to the New York Times, after Biden’s clean electricity program was cut from the spending bill last month.

If the U.S. administration can’t get behind the rest of the world on carbon pricing, there are other ways to follow through with the initiative, says Barker, such as regulations, taxes, and emissions trading.

The U.S. has considered carbon import fees and emissions trading that would apply to carbon-intensive products imported to the country. “But carbon import fees only make sense if you have some kind of domestic U.S. carbon policy,” says Richard Newell, president of Resources for the Future, a nonpartisan energy and environment research organization.

He thinks a price on carbon ultimately is achievable as part of U.S. policy as the world grapples with the seriousness of climate change and turns more to financial incentives to reach a low-carbon ecosystem that supports the entire economy.

The Biden administration has a government-wide plan addressing how climate change could affect all sectors of the U.S. economy. The plan was part of a larger agenda to eliminate greenhouse gas emissions in half by 2030 and transition to a net-zero emissions economy.

“There is also going to be a desire to raise revenue to deal with climate change, and for other public purposes, and carbon pricing does all those things,” Newell said. He added that while an economy-wide carbon fee would be the best solution, the administration could start by applying carbon fees to individual sectors.

As the U.S. decarbonizes areas like the power sector and automotive sector, Newell says pressure on government regulation will intensify. “There will be an increasing recognition that to really decarbonize the economy, across all sectors, there is going to be a need for some comprehensive policies,” he said.

“There has been a significant shift across the country in terms of the seriousness with which people and legislators are confronting climate change,” Newell said. ”And that will continue to build beyond the focus on particular sectors.”

The debate over a carbon pricing mechanism right now takes place at a time of rising concerns about inflation and prices at the gas pump that have led to discussions about whether the government should tap the Strategic Petroleum Reserve. The methane fee sparked a debate with some worrying that raising the price of methane would increase electric and heating costs for individual consumers.

Fears of rising prices for low-income households and increasing costs for businesses will need to be considered.

“If politicians are smart and anticipate that they need to compensate, say families that might see their bills go up as a result of a carbon price, you can drive [carbon pricing] through,” Barker said.

In a plan put together by the Climate Leadership Council, a climate advocacy group co-founded by former Secretary of State James Baker, who served in the Bush and Reagan administrations, the idea isn’t to fund government efforts to fight climate. The Climate Leadership Council’s plan outlines that revenue collected from a carbon fee is “to be returned to American households,” said Carlton Carroll, Climate Leadership Council spokesperson.

“Nothing would do more to accelerate innovation and invest all citizens in a clean energy future than an economy-wide carbon fee, with corresponding dividends for the American people,” Carroll said.

The group’s carbon dividends plan cites four major benefits to consumers, including an increase in household disposable income nationwide.

Increasing carbon pricing could be done by taxing greenhouse-gas intensive goods and services, like gasoline, or by taxing carbon emitters individually. The Climate Leadership Council is among groups advocating for pricing carbon-intensive goods as part of a U.S. climate plan, “because it will go further, faster than any other single climate policy intervention,” says Carroll, “while also driving innovation throughout the economy and making families better off financially.”

Historically, there has been some bipartisan support for a carbon tax. The first carbon pricing proposal was introduced in 1990, and there have been several other propositions since. Though none have passed, Newell said the most recent carbon pricing proposal in Biden’s social safety and climate plan piqued the interest of Congress far more than anticipated.

The carbon tax proposed as part of the Build Back Better plan would impose a $20 fee per metric ton of carbon.

“I would say there was a surprisingly strong interest in a carbon fee as part of the ongoing budget reconciliation process,” Newell said.

But Mindy Lubber, CEO of sustainability investment organization Ceres, told CNBC earlier this year that while a carbon tax is one way to prevent the U.S. from being locked into a fossil fuels economy and spur the development of new energy and transportation systems, it has proven controversial in the past, and is a complicated policy tool, making it harder for all sides to reach agreement on, especially in a Senate where the votes are so tight.

A carbon tax could be closer than some people think, says Flannery Winchester, spokeswoman for the progressive Citizens Climate Lobby. ”It has gone from a hopeful idea to one that is on the verge of becoming a reality,” she said.

The White House and 49 senators were on board with a carbon tax, but not the key vote from West Virginia Democratic Senator Joe Manchin.

“But there is clearly a lot more consensus than there’s ever been that this policy is effective for meeting America’s climate goals,” Winchester said.

Environment

Elon Musk’s SpaceX bought tens of millions worth of Cybertrucks Tesla can’t sell

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4 hours ago

December 18, 2025

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Elon Musk's SpaceX bought tens of millions worth of Cybertrucks Tesla can't sell

Tesla Cybertrucks freshly delivered to SpaceX via Nasa Space Flight on Youtube

As demand for the Cybertruck can’t reach more than about 10% of Tesla’s planned production capacity, Elon Musk used his privately owned company to try to boost demand.

We now learn that SpaceX has bought tens of millions of dollars’ worth of Cybertrucks – potentially over a hundred million.

Elon Musk said that he expects Tesla to sell as many as 500,000 Cybertrucks per year.

Tesla actually planned to produce up to 250,000 Cybertrucks annually at the Gigafactory Texas. It never came even close to that.

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The automaker is extremely opaque about its sales data, bundling Model S, Model X, and Cybertruck sales together.

However, based on registration data and historical split of Model S/X sales, we can estimate that Tesla is having issues selling even 20,000 Cybertrucks per year – less than 10% of its planned capacity.

By definition, the Cybertruck is a commercial flop.

Tesla boasted over 1 million reservations for the vehicle ahead of production, but it is estimated to have converted only about 60,000 of those reservations into orders since production began more than 2 years ago.

There are many reasons for this, but it is primarily because the Cybertruck costs much more than initially announced at the unveiling in 2019 and has less range and fewer cool features than the prototype.

The Cybertruck was originally supposed to have a tailgate that doubles as a ramp. The production version is not equipped with that.

SpaceX to the rescue

Earlier this year, we reported that Tesla started delivering truckloads of Cybertrucks to SpaceX and xAI, Elon Musk’s privately owned companies.

Now, a source familiar with the matter told Electrek that SpaceX bought over 1,000 Cybertrucks from Tesla and that it could ramp up to about 2,000 over time.

Hundreds of Cybertrucks can currently be seen parked in SpaceX’s lots in Southern Texas:

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Volkswagen boss declares the end of small gas cars, urging the future is electric

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5 hours ago

December 18, 2025

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Volkswagen boss declares the end of small gas cars, urging the future is electric

Volkswagen’s upcoming family of smaller, more affordable EVs will not be offered with a gas-powered engine. Volkswagen brand boss Thomas Schäfer said small gas cars make no sense, urging “the future in this segment is electric.”

Volkswagen shifts from small gas cars to EVs

During an interview with Auto Motor und Sport (via Ecomento), Schäfer explained that “Offering new gasoline-powered models in the Polo class and below makes no sense in light of future emissions regulations.”

The comments come as the German auto giant prepares to launch its new family of mass-market electric cars, starting with the ID.Polo in Spring 2026.

“The future in this segment is electric,” Schäfer urged, adding that new gas cars would be “too expensive,” and wouldn’t make any sense.

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With the Polo-sized electric car due out next year, the report suggests Volkswagen’s upcoming entry-level EVs will not get any sister models with a gas engine. Although the VW brand CEO didn’t say exactly how long it plans to continue selling ICE versions of the Polo and T-Cross, local reports suggest it could still be until 2030.

As for hydrogen-powered cars, Schäfer called them “a sham discussion” for the volume segment. “There simply isn’t enough green hydrogen, the fuel cell is far too expensive, and the technology isn’t efficient either,” he said.

“The only way to quickly decarbonize mass-market cars is through electric drive,” according to Schäfer. The ID.Polo is kicking off a new generation of Volkswagen as its first EV to bear an established brand name.

Volkswagen-low-cost-electric-SUV — Volkswagen brand CEO Thomas Schäfer and the ID.Cross affordable electric SUV concept (Source: Volkswagen AG)

Volkswagen is set to launch the Polo EV in Europe next Spring, starting at around €25,000 ($30,000). The electric version of the T-Cross, the ID.Cross will follow it in mid-2026. Volkswagen has yet to reveal prices, but the ID.Cross is slated to sit below the ID.4, which starts at around €35,000 ($41,000).

Volkswagen-affordable-EVs — Volkswagen ID.Polo GTI (left), ID.Cross (middle), and ID.Polo (right) Source: Volkswagen

Both will be based on VW’s new MEB+ platform, set to underpin Volkswagen’s upcoming entry-level EV series. An even smaller, lower-priced ID.1 is due out in 2027, which will serve as a replacement for the e-UP!.

Electrek’s Take

Finally, a global OEM has the right idea. Volkswagen appears to be finally on the right path with its new entry-level EV lineup.

Schäfer is correct. Small gas-powered cars don’t have a future, but it’s not just because of stricter emissions rules. Buyers are looking for smaller, more efficient electric vehicles.

Through the first 10 months of the year, electric vehicles accounted for 16.4% of vehicle registrations in Europe, up from 13.2% in October 2024.

According to data from the European Automobile Manufacturers’ Association, the market share of gas and diesel-powered cars fell to 36.6% from 46.3% during the same period.

Chinese and Korean brands, such as BYD, Kia, and Hyundai, are seeing early success in Europe with mass-market EVs like the Dolphin Surf, EV3, and Hyundai Inster EV. Volkswagen looks to grab its share with the ID.Polo and ID.Cross arriving in 2026.

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Rivian rolls out software update 2025.46, including Universal Hands-Free driving and digital key for Apple and Android users

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5 hours ago

December 18, 2025

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Rivian rolls out software update 2025.46, including Universal Hands-Free driving and digital key for Apple and Android users

Rivian has just shared details of its latest over-the-air software update 2025.46, which includes some of the new features announced during its recent AI and Autonomy event last week. The update features a new digital key function for Gen 2 R1 owners, “flavorful” drive styles, kick turns, tuning, and, of course, Rivian’s new Universal Hands-Free driving capabilities.

There’s a lot to unfold with the 2025.46 software update, so we’ll provide a quick recap of our visit to Rivian’s Palo Alto facilities last week for its inaugural AI and Autonomy Day. During the exclusive event, Rivian executives, like founder and CEO RJ Scaringe, unveiled the company’s new in-house designed silicon chip, which will help power its new dedicated autonomy platform.

In addition to adding LiDAR to the upcoming R2 models, Rivian shared plans to expand its Enhanced Highway Assist ADAS to support Universal Hands-Free driving. That includes expanded availability of the feature from 135,000 miles to over 3.5 million miles of roads across the US and Canada.

According to Rivian, this availability is expected to start rolling out in early 2026. However, it appears the process is now underway with its latest software update, which includes a slew of other noteworthy upgrades.

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2025.46 includes Rivian’s Universal Hands-Free driving

According to a blog post from Rivian this morning, a key rollout in its end-of-the-year software update is Universal Hands-Free driving, which significantly expands the number of roads on which R1 owners can engage the driving assist feature.

With update 2025.46, Gen 2 drivers can engage Universal Hands-Free on virtually any road where lane lines are clearly marked. Note that this is not a full autonomy feature (yet), so Hand-Free cannot slow or stop at lights or stop signs.

Speaking of autonomy, Rivian is introducing three new Drive Styles for its assisted driving features, including Universal Hands-Free, Highway Assist, Adaptive Cruise Control, and Lane Change on Command. After the update, R1 owners will be able to choose their “spice level” of autonomous functions:

Mild: A relaxed style with more gap distance and more gradual lane changes.
Medium: A balanced style to manage cut-ins and accelerate with traffic flow.
Spicy: A more dynamic style with a tighter gap distance and quicker steering during lane changes.

Source: Rivian

Another significant bonus, in addition to Universal Hands-Free, is Rivian’s new Digital Key feature for Gen 2 R1 owners. Following the 2025.46 update, owners will now be able to add their R1S or R1T key to their digital wallet on iPhone, Apple Watch, Google Pixel, or Samsung devices. Digital Key provides an additional means of easy access to your EV, as well as the ability to share keys with family and friends.

Other features in software update 2025.46 include a new way to view the Driver Display for both Gen 1 and Gen 2 R1 owners. Per Rivian:

Gen 2 drivers can now switch between the Autonomy view, which shows surrounding lanes and vehicles, and the Maps and Navigation view on the driver display. Gen 1 drivers can switch between the Driver Assistance view, which shows vehicles and objects up ahead, and the Maps and Navigation view on the driver display. Press the right thumbwheel on the steering wheel to swap.

Here’s an example:

Source: Rivian

Last but not least, Rivian is introducing some exciting new features for R1 Quad owners. Software update 2025.46 includes a new tuner screen from the Rivian Adventure Department (RAD) – “a team of engineers, software developers, and designers who create and test features that push the boundaries of our vehicles.”

The RAD Tuner (seen below) was initially used by teams at Rebelle Rally and Pikes Peak, but is now available to Gen 2 Quad owners. Those drivers will be able to tune beyond Rivian’s factory presets and customize the vehicle’s behavior to their preferences and/or the terrain. Touch sliders control custom, savable drive modes that include factors such as acceleration, torque balance, and stability.

In addition to RAD Tuning, Rivian’s latest software update also includes the ability for Gen 2 Quad drivers to perform Kick Turns. Per the blog post:

Turn makes it easier to steer in tight off-road conditions while moving at speeds under 15 mph (24 km/h). It works by controlling the power and tire grip, letting the vehicle spin about its center, even when it’s moving. You can now make tighter turns with just a simple button press. When you engage Kick Turn, your R1 Quad smartly adjusts the power to the inside wheels, slowing them down or even reversing them. This precise control over wheel slip ensures your vehicle turns exactly as quickly and smoothly as you intend.

Electrek‘s Seth Weintraub tested it out in Lake Tahoe earlier this year, and it’s absolutely incredible. Check it out: