Managing the Environmental and Cost Uncertainties in Pricing Carbon

January-February 2020, Paper, "Cap-and-trade and pollution taxes share an important characteristic: they each provide businesses the discretion to explore, identify, and exploit the lowest-cost ways of reducing pollution. In contrast to regulatory approaches that prescribe a specific technology or source-specific level of performance, these so-called market-based instruments provide the incentives to drive emission abatement where it is cheapest to do so throughout the economy."