ABSTRACT
To explain this conclusion, I first characterize the differences between price and quantity controls for GHGs. I then present both theoretical and empirical evidence that price-based controls are preferable to quantity targets on the basis of these differences. Finally, I discuss how price controls can be implemented without a general carbon tax. This point is particularly salient for the United States, where taxes are generally unpopular. The “safety valve,” as it is often called, involves a cap-and-trade GHG system accompanied by a specified fee or penalty for emissions beyond the initial cap.
