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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