Argument: A carbon tax obligates participation

Issue Report: Cap-and-trade versus carbon tax


TerraPass, “Carbon tax vs. carbon market: who would win in a fight?”. 15 Sept. 2006: “…another key difference between the two methods is that everyone automatically participates in a carbon tax, making it an opt-out program where you’d automatically pay the tax unless you took specific action to avoid it. A carbon market, on the other hand, is an opt-in program where you’d have to learn about it and take some action to become involved. I think I have read that some other economically ‘good for you programs’ like deferred compensation or 457K have found that the opting in system doesn’t seem to attract as many people as it should. I wonder how much education and marketing it would take to get widespread awareness and participation in a proactive program?”

  • Whatever the case, there are certainly risks and uncertainties involved in an opt-in program as to the likelihood that the public and businesses will get involved in the program. Conversely, with a carbon tax, none of these uncertainties exist; the tax is essentially obligatory.