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Paying for PollutionWhy a Carbon Tax is Good for America$
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Gilbert E. Metcalf

Print publication date: 2019

Print ISBN-13: 9780190694197

Published to Oxford Scholarship Online: January 2019

DOI: 10.1093/oso/9780190694197.001.0001

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Cap and Trade: The Other Way to Price Pollution

Cap and Trade: The Other Way to Price Pollution

Chapter:
(p.73) Chapter 5 Cap and Trade: The Other Way to Price Pollution
Source:
Paying for Pollution
Author(s):

Gilbert E. Metcalf

Publisher:
Oxford University Press
DOI:10.1093/oso/9780190694197.003.0006

This chapter reviews another way to put a price on pollution: establishing a cap and trade program. It describes what cap and trade is, how it puts a price on pollution, and its use around the world. The chapter then goes on to make a case for why a carbon tax is a better approach than cap and trade for pricing carbon pollution in the United States. While either cap and trade or a carbon tax is preferable to the other options discussed in chapter 4, a carbon tax still has significant advantages over cap and trade.

Keywords:   carbon price, cap and trade, carbon tax, hybrid policies, price volatility

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