Everyone agrees that it's necessary to reduce carbon emissions   around the world. There is less agreement over exactly how nations should go about achieving a more carbon - free planet. Thus, the environmental equivalent: cap - and - trade carbon emissions, or place a carbon tax on all users? With cap - and - trade programs, governments limit the level of carbon produced by an industry. Companies that hold their emissions below the _ can sell their remaining allowance on a carbon market, while companies that go beyond their limit must purchase credits on that market. Carbon taxes are more straightforward: a set tax rate is placed on the consumption of carbon with the idea that raising the price will encourage industries and individuals to consume less. At the moment, cap-and-trade has the upper hand, but doesn't defeat the tax just yet. Supporters of the tax argue that a cap - and - trade system would be too difficult to administer - and too easily gamed by industries looking to sidestep emissions caps. Cap-and-trade advocates contradict that like all other flat taxes, a carbon collection would relatively burden lower - income families, who spend a greater percentage of their income on energy than rich households. So which system will have a larger effect on carbon consumption? A 10% carbon tax might reduce the demand for carbon about 5 % or less, according to an analysis by the Carbon Tax Center, an environmental advocacy group. That may not be enough. Businesses and governments haven't figured out how the two competing systems can work together, but in the end, the world may need both. According to the cap - and - trade program, companies  _   .
are forbidden to produce carbon emissions are allocated the same amount of carbon consumption can sell their remaining allowance within their limits can sell the extra amount of carbon at a higher price