Cap And Trade And Carbon Tax Essay

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The extent and causes of global warming have become an issue of argumentative political debate in major countries, for instants, China, the United State, India, and Russia who produced most of greenhouse gases (Brander, 2014). The temperature on earth has increase dramatically that caused by greenhouse gas or CO2 emission (Carbon dioxide emission is the greenhouse gas produced by human activities) is a negative externality problem that affects the world. Not only it damaged the atmosphere and cause of melted of ice from the north pole due to the changed of warmer weather that is significantly the main reason of natural disaster in the future but also impacts humans’ health. Therefore, it is governments’ responsibility to help companies produced …show more content…
According to USCAP Blueprint, it showing that cap and trade is the most economically efficient way that impact and reduce CO2 emission. By the reasons, cap and trade environmental outcome is guaranteed compare to carbon tax. Attributable to the setting of tax rate with the intention of reducing emissions by a certain amount would contain a lot of conjecture, it will need to be updated as economic change, and thus tax does not guarantee that targeted emission reductions will be succeeded. Additionally, cap and trade is an effective long-range planning associate with carbon tax. “While a carbon tax provides a high level of price certainty that facilitates long-term economic planning, cap and trade will always provide a price signal consistent with the ongoing cost of actually meeting the emission reduction targets”(USCAPs Issue Brief "Cap and Trade vs. Carbon Tax", 2009). Finally, it is an opportunity for companies when they can reduce CO2 emission because they can sell their unused credit portions of CO2 emission to other companies who struggling with the pollution problem, this can reduces the overall cost to society of the legislation, creating a more efficient system in economic terms (Editor, 2015). It is because of these effective outcomes that makes cap and trade so

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