Dollars and Environmental Sense: Economics of Environmental Issues
Cape, trade and Carbon dioxide: Cape and trade is the most environmentally and economically sensible approach to control greenhouse gas emissions. The "cap" is a limit on emissions; amount of pollutants release which is reduced over time while the trade creates a market for carbon allowances ( economic incentives) in form of permits, taxes, legal emissions limit etc. (per year) There are two reasons for the economic incentives: Money raising for further environmental friendly activities Discourage industrial and business individuals to emit less. Critics of direct tax believe that taxation is not a very effective measure for businesses as they pass on their taxes in their prices on the consumer ( though there is decrease in sales graph yet not very much effective). Critics of legal emissions believe that government may pace unfair burden on businesses while fixing taxes. Also the need of extensive monitoring may place burden of societ...