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a) carbon taxation

According to the World Bank (n.d.b), a carbon tax is a pricing mechanism that directly sets a price on carbon emissions or the carbon content of fossil fuels, aiming to capture the external costs of carbon emissions and incentivise polluters to reduce their emissions. It establishes a tax rate on GHG emissions and provides an economic signal for polluters to either decrease their emissions, discontinue polluting activities, or continue polluting while paying for the emissions. It differs from emissions trading systems as the emission reduction outcome is not pre-defined, while the carbon price is.

World Bank (n.d.b). Carbon pricing. The World Bank.

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