Defined as a tax based on greenhouse gas emissions (ghg) generated from burning fuels. Puts a price on each tonne of ghg emitted, sending a price signal to elicit a market response across the entire economy, resulting in reduced emissions. It provides an incentive without favouring any one way of reducing emissions. Industry: measured costs and benefits of pollution abatement subject to changes in the economy, ability or degree to which individuals and interest groups can influence decision- making: Global ghg emissions: cannot remove all pollutants: Assimilative capacity of the environment varies: common property resources difficult to safeguard in a free- market economy (excludability and subtractability) We need the market to tell the ecological truth lester brown. Common property resources => manage (who can control the commons; failed kyoto, Neoclassical economics: resources are limited or find a substitute: more growth = better. Invisible hand adam smith: discounting future scarcity & environmental goods & services.