Under a carbon tax system, the price of emissions is
Understand the Problem
The question focuses on understanding how the price of emissions is determined under a carbon tax system. It presents four possible scenarios and asks you to identify the correct one. The key concept here is the mechanism by which a carbon tax influences the cost of emitting carbon.
Answer
Under a carbon tax system, emitters pay a fee for each ton of greenhouse gas emissions.
Under a carbon tax system, the price of emissions is a fee that emitters must pay for each ton of greenhouse gas emissions they emit.
Answer for screen readers
Under a carbon tax system, the price of emissions is a fee that emitters must pay for each ton of greenhouse gas emissions they emit.
More Information
A carbon tax aims to reduce greenhouse gas emissions by making polluters pay for the environmental damage they cause. The tax can be applied to various sources of emissions, such as the carbon content of fossil fuels.
Tips
A common mistake is thinking a carbon tax is the same as a 'cap-and-trade' system. A carbon tax directly sets a price on emissions, while a cap-and-trade system sets a limit on emissions and allows companies to trade emission allowances.
Sources
- Carbon Tax Basics - Center for Climate and Energy Solutions - c2es.org
- What is Carbon Pricing? - carbonpricingdashboard.worldbank.org
- Carbon Tax: Definition, Pros and Cons, and Implementation - earth.org
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