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“the general advantage of cap-and-trade is that it makes it profitable for entrepreneurs to innovate.” So does a tax. Innovating in green tech reduces your exp
by Prrometheus 19y ago
“the general advantage of cap-and-trade is that it makes it profitable for entrepreneurs to innovate.”
So does a tax. Innovating in green tech reduces your expenses on carbon tax. Some may complain that this is a reduction in costs instead of an increase in revenue, but the two are equivalent.
The entrepreneur can also sell his green tech to other businesses who want to avoid heavy carbon taxes.
- Alex3917 19y agoLet's say you have two companies. It costs company A 500 dollars per ton of emissions eliminated. It costs company B 100 dollars per ton of emissions eliminated. Under a cap-and-trade system, company A can pay company B to reduce its emissions twice as much. This way you reduce the total amount of carbon dioxide pollution by the same amount as creating a tax would, but it is much more economically efficient. My understanding is that this doesn't work under a carbon tax. Again though, the environment/economics aren't really my areas of expertise.