Does carbon pricing reduce GHG emissions?

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  • Depends on the design and implementation of system. In the case of

    • Carbon tax

      • Initial rate of carbon tax

      • Rate of yearly increase in carbon tax

      • Exemptions

      • Use of offsets

      • Border tax adjustments

    • Cap and trade

      • Emissions reduction target

      • Rate of decrease in number of allowances, or rate of tightening of emissions cap each year

      • Allocation of permits or allowances

        • free

        • auction

      • Use of offsets

      • Use of price ceiling and floors

      • Border tax adjustments

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