Comparing Cap-And-Trade To Carbon Taxes

  • Scott Detrow

With California implementing the nation’s first cap-and-trade system, and some Democrats in Washington renewing calls for a tax on carbon emissions, FuelFix compares and contrasts the two schemes: 

Both approaches – a carbon tax and cap and trade – put a price on the emissions that are heating the planet. But they do it in different ways. Use both systems at once, and companies could end up paying twice for the same pollution.
“You either have one or the other – you don’t have them both,” said Jasmin Ansar, climate economist with the Union of Concerned Scientists, an environmental group. “You’d have the danger of, in effect, double taxation.”
The chance of Congress adopting a carbon tax still seems remote. Many Republicans, doubtful about climate change, remain adamantly opposed to the tax, saying it would do little more than raise gasoline and electricity prices. The conflict with California’s cap-and-trade system may never happen. But it’s enough of a chance that officials at the California Air Resources Board, which oversees the cap-and-trade program, have started discussing it, even if they’re not sure how to respond.

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