ABSTRACT
The market for carbon is complicated and there are multiple points where any meaningful change can be prevented by outside interests. From an economics perspective the problem that carbon emissions pose is one of negative externalities. The classic example is generally an industrial factory polluting the air. Cap and trade is widely accepted as potentially one of the most effective methods for reducing emissions into the environment. A carbon tax is a much simpler system, not only in its design but also in the implementation and enforcement. Simply, the carbon tax system can be implemented by placing a tax on how much CO2 is emitted by certain industries and individuals. CO2 has proven to be difficult to price, and there is wide variation in how the measure is arrived at. Any solution to the problem of pricing carbon emissions can be as simple as we want.
