A transferable emission permit scheme will always be superior to an emission tax when it comes to developing an economically efficient carbon pricing scheme.

Question

Quizplus · Accepted Answer

A transferable emission permit scheme (cap-and-trade) and an emission tax (carbon tax) each have their own advantages and disadvantages, and the superiority of one over the other depends on various factors such as the specific environmental target, economic conditions, and the ability to accurately measure emissions. The efficiency of either approach in achieving carbon pricing objectives can vary based on these factors.

A Transferable Emission Permit Scheme Will Always Be Superior to an Emission