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Demystifying the Carbon Markets Episode 2 | Mark Lewis Head of Climate Research, Andurand Capital LLP

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Carbon Tax or Cap and Trade?

A cap and trade system in putting a cap, as the name implies, on the absolute level of omissions. And reducing that cap over time guarantees you an outcome based on quantity. Whereas with a carbon tax, you are controlling for price, and the price will determine the quantity. So i just, i think that's the simplest way to begin in terms of understanding what a capin trade scheme is driving at.

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