Essay

Evaluating Policy Responses to Climate Change

Climate change is often cited as a prime example of a global market failure. Two common policy proposals to address the negative externalities associated with greenhouse gas emissions are a carbon tax and a cap-and-trade system. Evaluate the effectiveness of these two distinct policy approaches in correcting this market failure. In your evaluation, consider their potential impacts on economic efficiency, equity (fairness), and administrative feasibility.

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Updated 2025-07-31

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