A number of bills have been introduced in recent years to put a price on carbon via a federal carbon tax. These proposals generally proceed from the implicit assumption that the federal government in general, and the U.S. Environmental Protection Agency (EPA) in particular, does not already have such authority. That is incorrect. Under a federal statute that has been on the books since 1952, EPA could impose a carbon “tax” any time an administration in power is willing to do so.

This Article explains that the conventional view of agency behavior—following the specific direction of the U.S. Congress or the president and using notice-and-comment rulemaking or adjudication processes—does not capture how public agencies and private entities develop innovative regulatory strategies and earn regulatory authority as a result. In particular, this Article explains how governmental agencies like the U.S.