We’ve got an accidental carbon tax

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Welcome to Friday.

President Donald Trump has made overturning climate policy a centerpiece of his second term. This week, his administration announced that the Environmental Protection Agency will no longer limit climate pollution from power plants, the latest reversal of policies established under former presidents Barack Obama and Joe Biden. 

Trump’s “broad rollbacks of federal greenhouse gas rules since January 2025 have altered the trajectory of US energy use and helped set back cuts to planet-warming pollution by about a decade,” Bloomberg reported (paywall) this week. 

Yet along the way, Trump’s policies have also unintentionally contributed to a Mirror Universe version of carbon pricing. Carbon pricing is a policy idea long promoted by environmental economists and some green groups.  

What is carbon pricing? 

The idea behind carbon pricing is that polluters should pay for the costs of damage to society and the environment. One of several ways to accomplish that goal is a carbon tax: a tax that governments impose on carbon pollution. 

With a carbon tax in place, “Everyone will suddenly have an economic incentive to avoid emitting greenhouse gases,” Alex Flint, executive director for the conservative Alliance for Market Solutions, told our radio team in 2019.

A carbon price can hit low-income people hard, because they spend a higher proportion of their income on electricity bills and gasoline than the wealthy. So many carbon pricing proposals include a mechanism to distribute the revenue back to citizens, such as in the form of a regular dividend check. 

These policies also typically include gradual, predictable price increases so that businesses can plan ahead. 

Carbon pricing has been implemented in some form in dozens of countries and U.S. states. But voter backlash has hampered adoption: Canada rolled back its consumer carbon tax, and Australia’s carbon price was short-lived.

Enter the Iran and Ukraine wars 

Although it was not a stated goal of either war, in practice, the conflicts between the U.S. and Iran and between Russia and Ukraine have resulted in dramatic price increases in carbon-rich oil and the products made from it. 

“Oil distribution has been a problem with the shutdowns in the Persian Gulf and Red Sea, but not as significant as the losses in refining capacity in Russia and the Middle East, Russia especially,” Jack Buffington, associate professor in supply chain management at the University of Denver, told CNBC.

As prices spike, countries may feel more pressure to move away from carbon. 

“Britain would be in much worse shape right now if wind power weren’t supplying about 30 percent of its electricity,” economist Paul Krugman wrote in March, shortly after the Iran war began. “In fact, the British and other Europeans must be wishing that they were getting an even larger share of their energy from renewables.”

But the accidental carbon pricing we’re living through comes with key differences from traditional policies. So far, it doesn’t include many protections for low-income households. Nor is it predictable: Businesses – and the rest of us – can do little more than wait to see what happens next.

– Sara Peach, Editor-in-Chief 

7 climate films to binge-watch this weekend

Sarah Wesseler reports: 

Stuck in his New York apartment during the pandemic, tech worker Alec Turnbull began thinking more and more about climate change, ultimately deciding to build a career in the field. 

Turnbull and his wife, J. English Cook, subsequently launched the first iteration of the Climate Film Festival during Climate Week NYC in 2023.

Having screened more than 100 films about climate change and the environment to thousands of audience members in the years since, Turnbull has become an expert in the genre. As the 2026 festival kicks off this week in New York, he offers his top streaming recommendations for people who can’t attend in person.

1. Yanuni

“A really amazing documentary about Indigenous leaders in the Amazon, backed by Leo DiCaprio,” Turnbull said. 

The film’s protagonist, Juma Xipaia, has survived multiple assassination attempts as a result of her environmental activism, which began at age 13 when her community in the Brazilian Amazon was threatened by the construction of a hydroelectric dam. The documentary traces her continuing struggle to protect the rain forest as an adult, including her work at the country’s newly formed Ministry of Indigenous Peoples.

Watch on YouTube.

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Tom Toro is the author of the cartoon collection “And to Think We Started as a Book Club…” and the creator of the comic Substack “Undiscovered Masterpieces.”