Carbon Price

A carbon price is introduced for reducing global-warming emissions. It is a cost applied to carbon pollution to encourage polluters to curtail the amount of greenhouse gas they emit into the atmosphere. It also provides an economically efficient means of reducing greenhouse gas emissions and minimizing the disruptive risks of climate change. Carbon cost as a planning

instrument recognizes revenue opportunities and risks to reduce costs, emissions and guide capital venture choices. There are two main types of carbon pricing:

  • Emissions trading systems (ETS) – It referred to as a cap-and- trade system – caps the total level of greenhouse gas emissions and allows those industries with low emissions to sell their extra allowances to larger emitters.
  • Carbon taxes- It directly sets a price on carbon by defining a tax rate on GHG emissions or on the carbon content of fossil fuels.

Consider the following statements:

  1. A carbon price is introduced for reducing global-warming emissions.
  1. Emissions trading systems and Carbon taxes are two main types of carbon pricing.

Which of the statements are true?

  1. Only 1
  2. Only 2
  3. Both 1and 2
  4. None of the above

Answer: C

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