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Cap-and-trade versus carbon tax: Are cap-and-trade markets more economical than a carbon tax?

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  • Carbon taxes are more economical.

    Cap-and-trade markets are a way of cheating that allows some companies to pollute more than they should. No company should pollute over a certain limited amount. All companies should be allowed a small amount of pollution, and there should not be a loophole that allows them to cheat the system.

  • No, a carbon tax allows new players to enter the market no matter what.

    No, carbon taxes are more economical than cap-and-trade, because a carbon tax does not limit the number of participants in the market. With a carbon tax, new players and producers will still enter the market if it is a viable option for them. With a cap-and-trade, there are only a set number of participants in the market, and if a business becomes profitable, it is the holder of the license to emit that will profit, not the government.


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