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Environment

The Carbon Market: Chasing Away Jobs and Capital without Reducing GHGs

A carbon market, like a carbon tax, aims to modify behaviours in order to reduce GHG emissions by setting a price for them. Although such mechanisms are regularly mentioned in the news, their economic consequences are less often discussed, to say nothing of their effectiveness. Does imposing a price on carbon always reduce emissions, or does it instead displace them, along with the accompanying economic activity? In the two scenarios examined here, the effect on GHG emissions would be negligible, but the economic impact would be significant.

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