Carbon Pricing and the Transition from Voluntary to Mandatory Markets

The current national and global call for a coordinated and meaningful response to climate change concerns is certain to shift the United States from several regional and voluntary carbon markets today to a global compulsory market in the near future. In addition to the clear environmental benefits, this changing landscape will result in groups of carbon market "winners" and "losers" – some market segments will gain favor and market share while others will lose economic opportunity. The competitive disadvantage for traditional energy in a carbon-priced world will be a catalyst for market-driven innovations in renewable energy, and sustainable development. There are many opportunities where Austin and Texas stand to gain as larger carbon pricing components are realized. This primer looks to explore the political, economic, and design considerations that will affect the development of the carbon market.