1. CAP AND TRADE VS CARBON TAX
2015

2. Emissions Certainty CAP AND TRADE Sets firm limits on emissions
Individual flexibility in achieving targets
CARBON TAX
Does set specific emissions targets
Emissions would vary year to year on markets
If prices high then willingness to pay more taxes would decrease amount companies would be willing to pollute

3. Price Predictability CAP AND TRADE
Prices for permits would fluctuate and therefore companies would not necessary know the price in order to plan costs
CARBON TAX
Permanent incentive to reduce emissions
Known quantity for businesses in order to plan
Can plan for investments in alternative fuels that have a high up-front cost

4. Ease of Use and Fairness
CAP AND TRADE
Substantially raise prices on goods and services
Low-income could be adversely affected
Would need to rebate part of profits back to consumers: industry would do this
Huge administrative structure would be need to regulate and monitor
CARBON TAX
It is transparent and easily understood
Would raise substantial revenue that the government could rebate

5. Impact on Consumers CAP AND TRADE Low-income individuals hit hard
Rebates harder to account and return
CARBON TAX
More understandable
Government controls revenues: more accountable

6. Environmental Effectiveness
CAP AND TRADE
Effectiveness depends on the following factors:
Will reductions be deep enough to have impact
Will the cap be nation-wide or industry-wide
Will any revenues be generated
CARBON TAX
Major question is whether the tax is set high enough to create market incentives to move to climate-natural technologies

7. Most politically realistic
CAP AND TRADE
Complex system that general public could not fully understand: groups can manipulate for their own purposes
Public is skeptical of large government agencies
Has a track record in Europe and N.E. United States
CARBON TAX
First and foremost the public is adverse to new taxes
Easier to educated the public