With reference to the , "Time to put a price on carbon emissions," which of the following is true about carbon pricing?

Question

A carbon tax can be used domestically to discourage fossil fuels and raise revenues.

The use of an Emissions Trading System (ETS) is the only way of pricing carbon.

The IMF has proposed price floors of $75, $50, and $25 a ton of carbon for the United States, China, and India, respectively.

The impact of carbon pricing is limited to individual industries.

(a)Only statement 1 is correct

(b)Only statement 2 is correct

(c)Only statements 1 and 3 are correct

(d)Only statements 1 and 4 are correct

Answer 1

Answer: (c)Only statements 1 and 3 are correct.

 

Explanation: The article describes three ways of pricing carbon: a carbon tax, Emissions Trading System (ETS), and import tariff on the carbon content. Of these, the establishment of a carbon tax domestically, as in Korea and Singapore, is one way of pricing carbon. The IMF has proposed price floors of $75, $50, and $25 a ton of carbon for the United States, China, and India, respectively. The article does not mention that the use of an Emissions Trading System (ETS) is the only way of pricing carbon or that the impact of carbon pricing is limited to individual industries.