1.4.1 Carbon Trading and Carbon Taxes (Edexcel A-Level Economics Teaching PowerPoint)

This teaching powerpoint covers Carbon Trading and Carbon Taxes

While both carbon trading and carbon taxes are environmental policy tools designed to reduce carbon emissions, they work in different ways.

Carbon trading, also known as cap-and-trade, is a market-based approach that sets a limit on the amount of carbon that can be emitted and then allows companies to buy and sell permits to emit carbon.

Carbon taxes, on the other hand, are a tax that companies have to pay based on the amount of carbon they emit. The main difference is that carbon taxes set a fixed price for carbon, while carbon trading allows the price to be determined by the market.