'An emissions trading scheme is a better policy instrument than a Essay

'An emissions trading scheme is a better policy instrument than a carbon tax in tackling climate change.' Critically evaluat - Essay Example Two of the most widely accepted instruments in this regard are: ‘Emissions Trading Scheme’ and ‘Carbon Tax’ (Van Asselt, 2010, p.126). Both of them are being utilized by the government in order to reduce toxic emission in the natural environment. However, the government has only limited the amount of emissions rather than solving this issue from the roots. Emissions trading scheme allows the industries to release a certain amount of pollutants in to the air. It is basically a market based approach which is supported by economic incentives (Cass, 2005, 38). When a firm successfully reduces its emission of pollutants then it is most likely valued by the government. In contrast to this the carbon tax is a mere pricing strategy according to which households and firms are supported to control pollution with the implementation of various technologies and plantation. In this case the firms have to pay a certain amount of tax because of burning fossil fuels or causi ng gas pollution (Eckersley, 2010, p. 367). This paper aims to critically evaluate the effectiveness and efficiency of both the pollution controlling strategies while supporting the claim that emissions trading scheme