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Question 7 (1 point) Carbon tax and the cap-and-trade: a) Are forms of carbon pricing b) Are more cost effective than regulatory measures based on source-specific limits c) Theoretically produce more emissions reduction per unit of expenditure than other types of polices such as renewable resource subsidies O d) All of the above are correct Question 8 (1 point)

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Option D. All of the Above is Correct.
The carbon tax and cap-and-trade strive to develop a progressive, dynamic solution to climate change. Companies are billed a lump sum for every massive amount of emissions they create under a carbon tax, whereas a cap-and-trade program issues a defined quantity of emits each year under a cap-and-trade strategy.

The difference between the two is that the former provides more assurance about the amount of decarbonization that will follow, while the latter offers little certainty about the expense of emissions. The Unit articulates elements of environmental efficiency and cost. Consequently, accurate emissions surveillance, hefty infraction fines, and high compliance have been features of the successful carbon tax and cap-and-trade regimes.