Argument: Carbon taxes are simple and easy to understand

Issue Report: Cap-and-trade versus carbon tax


“Carbon Taxes vs. Cap-and-Trade”. Carbon Tax Center: “Carbon taxes are transparent and easily understandable, making them more likely to elicit the necessary public support than an opaque and difficult to understand cap-and-trade system. A carbon tax is transparent and easy to understand; the government simply imposes a tax per ton of carbon emitted, which is easily translated into a tax per kWh of electricity, gallon of gasoline or therm of natural gas. By contrast, the prices for carbon set under a cap-and-trade system will vary with market fluctuations and be impossible even for big business (let alone small businesses or consumers) to predict. A cap-and-trade system will require a complex and difficult to understand market structure in order to balance the many competing interests and ensure that the trading system minimizes abuse and maximizes real carbon reductions.”