Sustainable Finance
Price or Quantity: The Core Trade-Off Between Carbon Taxes and Emissions Trading
The fundamental trade-off in carbon pricing is whether to fix the price of pollution, as with a carbon tax, or the quantity of emissions, as with an emissions trading system (ETS). Each approach offers a different type of certainty—price or quantity—and the choice reflects a jurisdiction's priorities and context.
Nolan Begay·November 5, 2026
