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Carbon tax v cap-and-trade: which is better?

2013-01-31 15:00:00| Climate Ark Climate Change & Global Warming Newsfeed

Guardian: Economists argue that, if the market is left to operate freely, greenhouse gas emissions will be excessive, since there is insufficient incentive for firms and households to reduce emissions. As such, they recommend applying the polluter pays principle and placing a price on carbon dioxide and other greenhouse gases. This can be implemented either through a carbon tax (known as a price instrument) or a cap-and-trade scheme (a so-called quantity instrument). A carbon tax imposes a tax on each unit...

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