Mr Nikolai Drahos1
1ANU, Australia
Biography:
Nikolai is a PhD candidate at the ANU School of Regulation and Global Governance, and a Visiting Research Fellow at the Oxford Institute for Energy Studies. Nikolai previously worked as a policy advisor at the Australian Climate Change Authority and as an energy economist at the Department of Industry, Science, Energy and Resources. Nikolai holds a Bachelor of Arts (Honours) and a Master of Environmental and Resource Economics from the ANU. He is a recipient of the Helen Hughes Masters prize and the Sir Roland Wilson PhD Scholarship.
Abstract:
Carbon pricing attempts have been repeatedly thwarted at the federal level in the United States. Yet in 2022 the United States adopted a federal price on oil and gas methane emissions as part of the Inflation Reduction Act (IRA), imposing a cost on an industry with significant political clout using a politically unpopular policy instrument. What made the first US federal carbon pricing scheme politically feasible? Using interviews with key insiders in the IRA negotiations, I provide the first study of the political history behind the US methane fee, identifying four dynamics that help explain the feasibility of carbon pricing: alignment with a prevailing policy consensus, quiet politics, divisions within the ranks of policy opponents, and institutional pathways that lower barriers to policy adoption. The case both departs from and corroborates prevailing models of the political economy of carbon pricing schemes, challenging elements of existing frameworks while reaffirming others.