Contact: Louisa Tavlas

WASHINGTON, D.C., December 7, 2023 – The Niskanen Center applauds the bipartisan reintroduction of the MARKET CHOICE Act by Congressmen Brian Fitzpatrick (R-PA) and Salud Carbajal (D-CA). A border-adjusted carbon tax–which would be established by the MARKET CHOICE Act–is the most efficient and effective tool in policymakers’ toolbox in driving decarbonization while securing a level playing field for American producers. As the EU starts implementing its carbon border scheme, some U.S. policymakers have formulated responses. Unlike a border-adjusted carbon price, like the MARKET CHOICE Act, these will be difficult to implement and will undoubtedly be challenged internationally

“As world leaders gather at COP28, the United States must remain at the forefront of measures to limit the magnitude and impact of climate change,” said Kasey White, Niskanen’s director of climate policy. “The MARKET CHOICE Act is a bold, bipartisan, and fiscally responsible policy that ensures American leadership in decarbonization and allows domestic producers to compete effectively in the global marketplace,” she added.  

While Congress has advanced climate-related legislation in recent years, we still lack an economy-wide policy. The MARKET CHOICE Act fills this gap while providing a unique revenue solution to a problem Congress constantly tries to address. Tying a carbon price to our infrastructure financing would have a generational impact on the building blocks of our daily lives.  

Here are some of the MARKET CHOICE Act’s key components:

  • Sets a carbon tax at $35/ton with an annual increase of 5% indexed to inflation
  • Eliminates the federal gas tax on highway and aviation fuels
  • Uses the carbon tax revenue to replenish the Highway and Airport Trust Funds
  • Other revenue uses include state grants for low-income household assistance; displaced worker retraining; research and development; adaptation planning, and other decarbonization programs
  • Pauses Clean Air Act enforcement of stationary sources covered by the carbon tax, giving producers regulatory relief
  • Establishes a carbon border adjustment, giving domestic producers a level playing field in international trade while combating carbon leakage

We will continue to support the efforts of Congressmen Fitzpatrick and Carbajal to implement a border-adjusted carbon tax and look forward to the United States enacting strong, market-oriented climate policies like the MARKET-CHOICE Act. 

The Niskanen Center is a 501(c)(3) advocacy organization established in 2014 to change public policy through direct engagement in the policymaking process.