A cap-and-trade system to limit carbon emissions gives companies and businesses choices as to how they want to spend their carbon allowances. Firms can choose to buy solar, wind or biofuels to offset a carbon footprint. Or, they can simply pay whatever fines or fees for going over their carbon cap every year. A cap-and-trade system means everyone benefits with increased revenue going towards green energy resources while curbing carbon emissions.
No, a cap-and-trade system does not better uphold democratic principles and justice better than a tax, because a tax still allows individuals to decide whether to enter the market. Although a tax makes the price to enter the market higher, an unlimited number of people can still choose to pay the tax and compete. A cap-and-trade system, by its purpose, limits the numbers of players, and will lead to undemocratic, political decisions.