Carbon pricing offers the potential to achieve greenhouse gas reduction targets at a lower cost to society than conventional regulation. However, at the same time, both cap and trade and carbon taxes would entail significant reallocation of costs relative to regulation. Policymakers seeking to implement these policy instruments thus confront new and sometimes surprising politics. Cross-national comparative research in this new arena of uncertain, hidden, and delayed costs and benefits can inform our understanding of the interactions of interest groups and political institutions. This paper will examine the failure of three jurisdictions – Australia, Canada, and the United States – to adopt cap and trade regimes. The three cases are similar in several respects: all have federal systems, all initially embraced demanding greenhouse gas reduction targets, all have powerful fossil fuel industries, and all were governed for much of the last decade by parties resistant to action on climate change. Yet they nonetheless failed in quite distinct ways, reflecting the complex interplay of organized interests, party coalitions, and political institutions. The particular regional distribution of costs and benefits in each case meant that federalism was an obstacle to policy change in Canada and Australia, even while it was an opportunity in the US. Changes in government in both Australia and the US promised change, but that was thwarted by complex intra-party coalitions in Australia and the weak party discipline inherent in US legislative institutions.
