SUMMARY - Carbon Pricing, Taxes, and Market-Based Tools
Putting a price on carbon has become the economist's preferred solution to climate change. The logic is elegant: if emissions carry costs, markets will find the cheapest ways to reduce them. Polluters internalize environmental damage rather than externalizing it to society. Investment flows toward clean alternatives. Yet carbon pricing remains politically contentious, technically complex, andâin most implementationsâinsufficient to drive the transformation climate science demands.