Emission charges and cap-and-trade systems are the two dominant market incentive-based approaches for the reduction of emissions. Describe how an emission charge or tax works. Describe how a cap-and-trade system works. Contrast the two systems: what are the fundamental differences between them? Do those differences matter? Provide two examples of jurisdictions that impose a carbon tax. Provide two examples of jurisdictions that imposes a cap-and-trade regime. As the manager of a business that produces emissions, which system would you prefer to face? Why?
Emission charges and cap-and-trade systems are the two dominant market incentive-based approaches for the reduction of emissions. Describe how an emission charge or tax works. Describe how a cap-and-trade system works. Contrast the two systems: what are the fundamental differences between them? Do those differences matter? Provide two examples of jurisdictions that impose a carbon tax. Provide two examples of jurisdictions that imposes a cap-and-trade regime. As the manager of a business that produces emissions, which system would you prefer to face? Why?
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Emission charges and cap-and-trade systems are the two dominant market incentive-based approaches for the reduction of emissions.
- Describe how an emission charge or tax works.
- Describe how a cap-and-trade system works.
- Contrast the two systems: what are the fundamental differences between them? Do those differences matter?
- Provide two examples of jurisdictions that impose a carbon tax. Provide two examples of jurisdictions that imposes a cap-and-trade regime.
- As the manager of a business that produces emissions, which system would you prefer to face? Why?
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