Cap-and-trade versus carbon tax: Is a market-based cap-and-trade system more feasible than a carbon tax?

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  • Tax is More Feasible

    A carbon tax is more feasible than a market based cap and trade system, and also more effective in curbing the release of greenhouse gas into the atmosphere. With cap and trade, large polluters can acquire enough carbon credits to pollute at will, but taxes impose limits evenly across all businesses.

  • Cabon tax is less hasle

    Cap-and-trade system assumes a cap over a certain amount, which is good from the environment standpoint, but may not be efficient for manufacturers whose capacity exceeds the cap. Rather than requiring them to trade with someone else for the right to additional emissions, why not simply tax when the amount exceeds a certain value.

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