With an emissions trading system, the policy involves setting a total cap or limit on carbon emissions, which makes companies switch to low-emission or renewable energy sources. In contrast, a carbon tax establishes a price directly on carbon emissions so that companies are charged a certain amount for every tonne of emissions produced.
While some countries have adopted both an ETS and a carbon tax, other countries have chosen to adopt one policy only. But, the question is - which policy can more effectively reduce carbon emissions?
On this episode of Eco Money, Daniel Lee, Associate Professor of Practice at the Nanyang Business School and Director of the Carbon Markets Academy at NTU’s College of Business shares his insights.
Presented by: Emaad Akhtar
Produced by: Yeo Kai Ting (ykaiting@sph.com.sg)
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