Full Title: Cap-and-Trade Versus Carbon Tax- Two Approaches to Curbing Greenhouse Gas Emissions
Author(s): Eleanor Revelle
Publisher(s): League of Women Voters
Publication Date: January 1, 2009
Full Text: Download Resource
Description (excerpt):
Policymakers evaluating strategies for reducing greenhouse gas (GHG) emissions have two general approaches to consider. A cap-and-trade system curbs emissions by limiting the quantity of a pollutant (e.g., carbon dioxide [CO2]) that can be emitted and then allocating a corresponding number of tradable emissions permits to sources covered by the program. A carbon tax curbs emissions by raising the price of fossil fuels based on their carbon content. Each approach has advantages and disadvantages, and a well-designed system of either type will be more effective than a poorly designed system of the other type.