Carbon 101 - the carbon market explained

Sizing up the market

Sizing up the carbon market

Lowering greenhouse gas emission levels is high on the international agenda. Many countries have set targets to reduce emissions, particularly carbon emissions. To reach these targets, schemes have been devised that put a price on carbon.

While taxation is one of the simplest ways to price carbon, it is better suited to domestic rather than international policy because the marginal abatement cost curve (MAC) differs by country. More precisely, based on the MAC of a country, one can use a Lagrang

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