This article examines the consequences of a previously unnoticed difference between pollutant cap-and-trade and pollution taxes. Implementation of cap-and-trade relies on a forecast of future emissions, implementation of a pollution tax does not. Realistic policy designs using either regulatory...

Reducing global carbon emissions and mitigating the adverse impacts of climate change is a fundamental environmental challenge. Australia's target is to reduce carbon emissions by between 26% and 28% by 2030 compared to 2005 emission levels. Carbon pricing can be an effective market-based...