Visualized: Carbon Pricing Initiatives in North America

Carbon pricing mechanisms are a vital component of an effective emissions reduction strategy. But these initiatives currently cover just 15% of total North American carbon emissions.

To discover which initiatives are currently contributing to this coverage, this graphic sponsored by the National Public Utilities Council maps out all of the national and subnational carbon pricing initiatives across North America using data from the World Bank.

Let’s begin by looking at types of carbon pricing.

Carbon Pricing Explained

Carbon pricing is a market-based policy tool that assigns a cost to carbon emissions, incentivizing reductions through the use of economic signals.

While there are several ways to go about carbon pricing, the most commonly used types of carbon pricing strategies include:

• Emissions Trading Systems (ETS)
  ETS establishes a market for trading emissions allowances among companies. A cap on total emissions is set, and all companies receive tradable emission units. Those exceeding their limits can buy allowances from those with a surplus.
• Carbon Taxes
  Carbon taxes impose a direct price on carbon emissions. Their goal is to disincentivize carbon-intensive activities, such as burning fossil fuels, by making them financially less attractive.

In 2022, carbon pricing strategies generated $5 billion in the U.S. and $8 billion in Canada. These funds were primarily allocated toward green investments and support for low-income households.

Carbon Pricing Initiatives By Country

The U.S. is currently the only country in North America without a national carbon pricing initiative. Both Canada and Mexico, on the other hand, have implemented federal ETS and carbon tax programs.

Beyond federal initiatives, many regions on the continent have also implemented or are considering their own carbon pricing initiatives. These subnational initiatives are listed in the table below:

The RGGI was the first mandatory ETS initiative in the U.S. and applies to power plants in Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont, and Virginia.

Since its inception, emissions in the RGGI region fell by more than 50%—twice as fast as the nation as a whole—and raised nearly $6 billion to invest in local communities.

Are All Carbon Pricing Initiatives Created Equal?

In the landscape of carbon pricing initiatives, one critical factor stands out—the price of carbon itself.

According to The High-Level Commission on Carbon Prices, achieving alignment between carbon pricing strategies and the Paris Agreement temperature target requires a price of US$40–80/tCO₂ by 2020 and US$50–100/tCO₂ by 2030.

Unfortunately, many North American initiatives fall short of these prices, especially in the U.S. and Mexico, where carbon prices reach as low as US$12/tCO₂e. Conversely, most Canadian initiatives set a price of US$48/tCO₂e.

It’s also important to note that the broader impact of these initiatives depends on a multitude of other factors, including the industries they cover, their flexibility in accommodating changing economic conditions, and the manner in which generated revenue is invested back into sustainable practices.

Within the balance of these various elements lies the potential to steer all industries—including the power sector—toward the necessary emissions reductions.

The 30 Largest Hydropower Plants in the U.S.

Did you know that the largest power plant in the United States is hydroelectric?

Hydropower is the second-largest source of U.S. renewable electricity generation and the largest source of power in seven different states.

The above infographic from the National Public Utilities Council charts the 30 largest U.S. hydropower plants and shows how droughts are starting to affect hydroelectricity. This is part one of two in the Hydropower Series.

Dam, That’s Large: U.S. Hydropower Plants by Generation

The top 30 hydropower plants account for around 50% of U.S. hydroelectric generation annually.

Hydropower plants are most prevalent in the Northwestern states of Washington and Oregon, jointly hosting 16 of the top 30 plants.

The Grand Coulee Dam in Washington is the country’s largest power plant. It generates over 19.5 million megawatt-hours (MWh) of electricity annually and supplies it to eight states, including parts of Canada. Overall, 10 of the top 30 hydropower plants are in Washington.

The Robert Moses Power Plant is a close second, located around 5 miles downstream from Niagara Falls. Combined with the nearby Lewiston Pump Generation Plant, it is New York’s single-largest source of electricity.

While hydropower is a relatively reliable renewable power source, prolonged dry conditions can put it at risk. That is the case for both the Glen Canyon and Hoover Dams, which are no longer running at previous capacities.

Running Dry: Water Scarcity and Hydropower

The Southwestern U.S. has been in a “megadrought”—a prolonged drought lasting longer than two decades—since 2000. In fact, it has gotten so severe that the past 22 years mark the region’s driest spell in 1,200 years.

Consequently, many Southwestern reservoirs have below-average storage levels. When these levels fall below a certain threshold, hydropower plants can no longer generate power.

In particular, storage levels are precariously low at Lake Mead (Hoover Dam) and Lake Powell (Glen Canyon Dam), which supply most of Arizona’s hydroelectricity. They are also the two largest reservoirs in the country.

Here’s a look at how filled these reservoirs are as of Dec. 4, 2022:

To put those figures into perspective, here’s an animation looking at Lake Powell’s surface area changes from 2018 to 2022:

Shrinking water levels at reservoirs threaten the reliability of hydropower and the millions of people that rely on it for electricity. As droughts become more frequent due to climate change, what does the future of hydropower look like?

Find out in Part 2 of the Hydropower Series, where we’ll dive deeper into how droughts are affecting dams and how hydropower fits into the bigger decarbonization picture.