The document compares carbon tax and cap-and-trade systems, highlighting their similarities, such as correcting market failures and generating revenue, and differences, including cost certainty and compliance flexibility. It provides data on global revenues, with carbon tax generating a significantly higher share at 77%. The conclusion suggests that while most countries use carbon tax, a mix of both policies could be beneficial.

1. Carbon Tax Vs. Cap-and-Trade: A
Comparative Analysis

2. Overview
• Carbon tax
• Cap-and-Trade
• Similarities
• Differences
• Application of Carbon tax and Cap-and-Trade
• Conclusion

3. Carbon Tax Cap-and-Trade

4. Similarities between Carbon Tax and Cap-and-
Trade
Correct market failure
Shift economy to use less carbon
Generate revenue
Increase public awareness

5. Differences between Carbon Tax and Cap-and-
Trade
Cost certainty Vs. environmental certainty
Impact of economic conditions
Compliance flexibility for firms
Experience to date

6. Global annual revenue (million)
Cap-and-Trade, 6572, 23%
Carbon Tax, 21,707, 77%
Source: Carl et al. (2016)

7. Global revenue from Carbon Tax (million)

8. Global revenue from Cap-and-Trade (million)
4640
1043
447
250
100
92
9
0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000
Europian Union Phase iii
California
USA
China
Quebec
Albarta
Switzerland

9. Spending revenue of Cap-and-Trade (million)
Europian Union
Phase iii
California USA China Quebec Albarta Switzerland
Green Spending 80 45 49 10 100 90 0
General fund 20 4 32 90 0 10 100
Revenue recycling 0 55 12 0 0 0 0
80
45
49
10
100
90
0
20
4
32
90
0
10
100
0
55
12
0 0 0 0
0
10
20
30
40
50
60
70
80
90
100

10. Spending revenue of Carbon Tax (million)
0
30
0 0 15 8
33
0 0 13
100 100
0
50
40
85
0 1
47
0
100
50
88
0 0
100
50
30
0
120
53
45
67
0
50
0 0 0 0
0
20
40
60
80
100
120
140
Sweden Norway UK British
Columbia
Australia Denmark Switzerland Maxico Finland Ireland Japan France Iceland
Green spending General fund Recycling revenue

11. California AB 32 Cap-and-Trade System
• Active period -November 2012-2020
• Coverage -Large emitters (>25000 t per year) industry, power
generation, Transport, natural gas
• Target -80% reduction in GHG emissions below 1990 levels by 2050
• Revenue -$477 m in 2013 (Expected revenue- Maximum $70 b in 2020)

12. California AB 32 Cap-and-Trade System
• Spending -Investment on ‘green’ projects
-Water energy efficiency water action plan
-Low carbon transportation subsidies
-High speed passenger rail system
-New recruitment in administration
-Distributed among rate payers

13. California AB 32 Cap-and-Trade System
• Results -The link to Québec has not impacted California’s market
price as the state, being the larger market, is the ‘price
maker’ for the two systems.
-Reduce the likelihood of over-allocation
-Subnational Global Climate Leadership

14. Sweden Carbon dioxide Tax
• Active period -1991 to ongoing
• Coverage -Fossil fuel used for heating and transport
• Revenue - $ 3.68 b (2013)
• Spending -Contributes to country’s general budget
-Administrative cost
-Green Tax shift

15. Sweden Carbon dioxide Tax
• Results -Cut carbon emissions by 9% with 44% economic growth
-Paying extra for filling the tank
-Service sector grew more
-Gift for buying green car

16. Conclusion
• Most countries use Carbon tax.
• Both are well implanted policy.
• Mixer of both policy also can be a good idea.

17. Thank You