4.1.8.9 Government Intervention - Carbon Trading and Taxes (AQA A-Level Economics Teaching PowerPoint)

This AQA Economics teaching powerpoint covers aspects of Government Intervention - Carbon Trading and Taxes

Here are the key differences between carbon trading and carbon taxes:

• Carbon trading involves a cap-and-trade system, where the government sets a cap on the total amount of greenhouse gas emissions allowed and issues permits or "credits" that can be traded among companies. Companies that produce less emissions can sell their credits to companies that produce more emissions, creating a financial incentive to reduce emissions.
• Carbon taxes, on the other hand, are a direct tax on carbon emissions. The government sets a price per unit of carbon emitted, and companies pay this tax based on their emissions. The higher the tax, the greater the incentive for companies to reduce their emissions.
• Carbon trading allows for more flexibility and is often seen as more market-friendly, while carbon taxes are simpler to implement and can provide more certainty to businesses and investors.