Discuss three pros and cons of cap-and-trade and carbon tax policy.

Posted: September 11th, 2023

In your paper,
Discuss any one concept from each of the three chapters- Chapters 4, 5, and 6 in your own words.
Carbon pollution is an example of negative externality. Two solutions to carbon pollution reduction have been offered: 1) Cap and trade – states cap the amount of CO2 that is “acceptable”, and they issue permits to pollute which the businesses must buy from the state if they need to pollute. Those permits are tradable in the open market. 2) Carbon tax: you will be taxed per unit of CO2 that you release into the atmosphere. Based on this,
Discuss three pros and cons of cap-and-trade and carbon tax policy.