This primer provides a comprehensive introduction to the topic. After a brief explanation of basic concepts, it reviews the EU’s proposed CBAM and U.S. congressional border adjustment provisions introduced in the 117th Congress (2021–2022). It also outlines key considerations in designing a carbon border adjustment.

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• The America’s Clean Future Fund Act (S. 685 and H.R. 2451) introduced by Sen. Dick Durbin (D-Ill.) on March 10, 2021 and by Rep. Marie Newman (D-Ill.) on April 12, 2021
• The Energy Innovation and Carbon Dividend Act of 2021 (H.R. 2307) introduced by Rep. Ted Deutch (D-Fla.) on April 1, 2021
• The Modernizing America with Rebuilding to Kickstart the Economy of the Twenty-first Century with a Historic Infrastructure-Centered Expansion Act of 2021 (H.R. 3039) introduced by Reps. Brian Fitzpatrick (R-Pa.) and Salud Carbajal (D-Calif.) on May 7, 2021
• The America Wins Act (H.R. 3311) introduced by Rep. John Larson (D-Conn.) on May 18, 2021
• The Save Our Future Act (S. 2085) reintroduced by Sens. Sheldon Whitehouse (D-R.I.), Brian Schatz (D-Hawaii), Martin Heinrich (D-N.M.), Kirsten Gillibrand (D-N.Y.), Jack Reed (D-R.I.), Chris Murphy (D-Conn.), and Dianne Feinstein (D-Calif.) on June 16, 2021
• The Methane Emissions Reduction Act of 2021 (S. 645 and H.R. 4084) introduced by Sen. Sheldon Whitehouse (D-R.I.) and Rep. Ted Deutch (D-Fla.) on June 23, 2021
• The Carbon Reduction and Tax Credit Act (H.R. 8572) introduced by Rep. Sean Patrick Maloney (D-N.Y.) on July 28, 2022
• Sec. 60113 of the Inflation Reduction Act of 2022 (P.L. 117-59), enacted on August 16, 2022
• The Healthy Climate and Family Security Act of 2022 (S. 5338 and H.R. 9645) introduced by Sen. Chris Van Hollen (D-Md.) and Rep. Don Beyer (D-Va.) on December 21, 2022

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Power: Digitalization can improve the grid’s ability to integrate more variable renewable energy, create an interconnected grid with multi-directional power flow, and expand the use of demand response strategies (including smart charging of electric vehicles).

Transportation: In addition to enabling electric vehicles to provide flexible load and storage resources for the power grid, digitalization of transportation can improve fuel efficiency (e.g., through route optimization) and enable autonomous driving systems.

Buildings: Digitalization of buildings—such as through energy management systems, smart heating and cooling systems, and connected appliances and equipment—can improve the comfort of occupants while reducing energy use.

Industry: “Smart manufacturing” approaches can optimize energy and resource use, improve supply chain management, and allow for differentiation of products based on environmental attributes.

Oil & gas: Digitalization in the oil and gas sector can help with preventative maintenance, detect and reduce emission leaks, and improve the sector’s environmental footprint.

Agriculture: “Smart farming” approaches can reduce emissions-producing inputs (e.g., fertilizers) and water use, better manage livestock production and animal health, enable urban and vertical farming, and improve accounting of carbon sequestration.

Realizing the decarbonization potential of digitalization, however, will require grappling with a number of informational, usage, financial, regulatory, technical, infrastructure, security, and privacy challenges. These include lack of knowledge and capacity, high upfront capital costs, outdated regulatory models, lack of interoperable standards, the current semiconductor supply crunch, limited access to broadband, cybersecurity vulnerabilities, and concerns about compromised privacy and proprietary business information.

These challenges are not insurmountable, and a range of policies at all levels of government could help. Policies to enable climate-beneficial digitalization across the economy include:

Investing in research, development, demonstration, and deployment, including appropriations for the digitalization demonstrations authorized in the Energy Act of 2020;

Driving deployment through government procurement, including requiring agencies to procure digital solutions, document the related energy efficiencies and cost savings, and publicize the lessons learned;

Enhancing understanding of digital technologies, including by incorporating these technologies in agency outreach activities and by developing real-time measurement and verification protocols for systems-level efficiencies in buildings, industry, power, transportation, and agriculture and land use;

Developing interoperable standards and communications protocols between devices and systems; and 

Investing in digital infrastructure, such as semiconductors and broadband.

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• • Clean Energy and Sustainability Accelerator Act (H.R. 806) introduced by Rep. Debbie Dingell (D-Mich.) on February 4, 2021
  • National Climate Bank Act (S. 283) introduced by Sen. Ed Markey (D-Mass.) on February 8, 2021
  • CLEAN Future Act (H.R. 1512) introduced by Rep. Frank Pallone (D-N.J.) on March 2, 2021
  • America’s Clean Future Fund Act (S. 685 and H.R. 2451) introduced by Sen. Dick Durbin (D-Ill.) on March 10, 2021 and by Rep. Marie Newman (D-Ill.) on April 12, 2021
  • LIFT America Act (H.R. 1848) introduced by Rep. Frank Pallone (D-N.J.) on March 11, 2021
  • The U.S. Green Bank Act (S. 1208 and H.R. 2656) introduced by Sen. Chris Murphy (D-Conn.) and Rep. James Himes (D- Conn.) on April 19, 2021

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• The Energy Innovation and Carbon Dividend Act of 2019 (H.R.763) introduced by Reps. Ted Deutch (D-Fla.) and Francis Rooney (R-Fla.) on Jan. 24, 2019;
• The Healthy Climate and Family Security Act of 2019 (S.940 and H.R.1960) introduced by Sen. Chris Van Hollen (D-Md.) and Rep. Don Beyer (D-Va.) on March 28, 2019;
• The American Opportunity Carbon Fee Act of 2019 (S.1128) reintroduced by Sens. Sheldon Whitehouse (D-R.I.), Brian Schatz (D-Hawaii), Martin Heinrich (D-N.M.), and Kirsten Gillibrand (D-N.Y.) on April 10, 2019;
• The Climate Action Rebate Act of 2019 (S.2284 and H.R.4051) introduced by Sens. Chris Coons (D-Del.) and Dianne Feinstein (D-Calif.), and Rep. Jimmy Panetta (D-Calif.) on July 25, 2019;
• The Stemming Warming and Augmenting Pay Act of 2019 (H.R.4058) introduced by Reps. Francis Rooney (R-Fla.) and Dan Lipinski (D-Ill.) on July 25, 2019;
• The Raise Wages, Cut Carbon Act of 2019 (H.R.3966) introduced by Reps. Dan Lipinski (D-Ill.) and Francis Rooney (R-Fla.) on July 25, 2019;
• The America Wins Act of 2019 (H.R.4142) introduced by Rep. John Larson (D-Conn.) on August 2, 2019;
• The Modernizing America with Rebuilding to Kickstart the Economy of the Twenty-first Century with a Historic Infrastructure-Centered Expansion Act of 2019 (H.R.4520) introduced Reps. Ryan Fitzpatrick (R-Pa.) and Salud Carbajal (D-Calif.) on September 26, 2019.
• The Carbon Reduction and Tax Credit Act (H.R.5457) introduced by Rep. Sean Patrick Maloney (D-N.Y.) on December 17, 2019;
• The America’s Clean Future Act (S.4484) introduced by Sen. Dick Durbin (D-Ill.) on August 6, 2020; and
• Consumers Rebate to ban Emissions and Boost AlTernative Energy Act (H.R.8175) introduced by Rep. Jerry McNerney (D-Calif.) on September 4, 2020.

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A strong body of scientific evidence underscores the imperative of decarbonizing the global economy in order to avoid the worst potential impacts of climate change. Key strategies for achieving that goal include increasing energy efficiency, decarbonizing the power sector, switching to electricity and other low- and zero-carbon fuels, reducing non-CO₂ climate pollutants, and using both nature and technology to remove carbon from the atmosphere.

In the United States, achieving net-zero emissions by 2050 will require action across society—by governments, the private sector, and the public at large. It will require both innovative technologies and strong policies to ensure they are deployed. And apart from reducing the grave risks of climate change, it will provide a strong foundation for continued U.S. growth and competitiveness.

Getting to Zero: A U.S. Climate Agenda recommends that a U.S. decarbonization strategy be guided by these key objectives: achieving net-zero emissions no later than 2050, reestablishing U.S. global leadership on climate change, developing and mobilizing a broad array of technological solutions, promoting cost-effective solutions, protecting and enhancing U.S. competitiveness and energy security, ensuring an equitable transition, strengthening climate resilience, responding to new information and circumstances, and providing predictability to drive long-term investment.

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