Should people think that cap and trade is a global carbon tax?



  1. 0 Votes

    Cap and Trade is not a taxing system, it is a different option for regulating carbon emissions. Essentially, when the program is started there is a set amount of carbon that all participating companies/factories/countries etc. can emit. As the program progresses each participant is required to reduce that level by a certain amount. Some participants will reduce more than the required amount, and they can sell their remaining shares of carbon allowance; while other participants will not reduce enough to reach the minimum and they will need to buy the extra credits from the people selling them. This differs from a tax because in a taxation system, the amount of carbon emitted is simply taxed. If you emit more, you pay more, emit less-pay less. 

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