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Chapter 8 in Tietenberg and Lewis looks at climate change, the most important environmental issue of our time. Economists generally agree that putting a price on carbon is the best approach to reducing climate warming carbon emissions. The two main strategies for doing this are carbon taxes and the cap and trade version of emissions trading.

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Discuss the pros and cons to these two approaches to pricing carbon.  Why do economists favor these kinds of market-based strategies to pollution control over “command and control” approaches such technology standards?

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2 scholarly references including the book chapter.

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