Carbon Tax
Carbon Emissions: Tax or Trade?
One of the central topics in the ongoing debate about global warming, carbon emissions, and the needs of businesses is whether governments should implement taxes on carbon emissions, construct an artificial carbon trading market and let the "invisible hand" place some controls on current and future pollution levels, or utilize some combination of these two options. There are many different ways in which to approach and address this debate, yet to develop an effective and meaningful decision in this regard a rational and objective decisions making model must be employed, rather than allowing specific political, environmental, business, or emotional arguments to enter the picture. This paper will attempt to apply certain specific decision making models to this issue in order to determine whether a carbon tax, a carbon trading system, or a combination of the two is most appropriate.
One method for such complex decisions is to develop a single criterion from the disparate criteria that actually exist as influences on a given issue, such as by weighting each individual criterion. In order to create a carbon market, for instance, the "market rate" for carbon emissions would need to be determined and weighed against the costs...
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