Market-based mechanisms that limit greenhouse gas (GHG) emissions can be divided into two types: quantity control (e.g., cap-and-trade) and price control (e.g., carbon tax or fee). To some extent, a carbon tax and a cap-and-trade program would produce similar effects: Both are estimated to increase the price of fossil fuels, which would ultimately be borne by consumers, particularly households. Although there are multiple tools available to polic...
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