Center for American Progress – Proxy Carbon Pricing, A Tool for Fiscally Rational and Climate-Compatible Governance, By Alison Cassady and Gwynne Taraska. April 2016.

“As the world unites to fight climate change, more and more countries are turning to carbon pricing as a means to reduce their greenhouse gas emissions. By putting a price on carbon, governments can correct the market’s failure to account for the climate costs of burning fossil fuels; in so doing, carbon pricing mechanisms encourage polluters to find cleaner, lower-carbon processes. Some countries have adopted emissions trading systems and carbon taxes to establish an explicit price on carbon, while others have turned to nonmarket regulatory policies that establish an implicit price on each ton of pollution. It is reasonable to expect these trends to continue as nations endeavor to fulfill the national and global goals to curb climate change that they established through the Paris agreement in 2015…”