Carbon Taxes vs. Cap and Trade: A Critical Review

  title={Carbon Taxes vs. Cap and Trade: A Critical Review},
  author={Lawrence H. Goulder and Andrew Schein},
  journal={Energy Policy \& Economics eJournal},
We examine the relative attractions of a carbon tax, a "pure" cap-and-trade system, and a "hybrid" option (a cap-and-trade system with a price ceiling and/or price floor). We show that the various options are equivalent along more dimensions than often are recognized. In addition, we bring out important dimensions along which the approaches have very different impacts, including some dimensions that have received little attention in prior literature. Although no option dominates the others, a… 
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  • Economics
    Review of Environmental Economics and Policy
  • 2009
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