A Broad-Based Carbon Tax May Be Preferred to a Targeted

Multiple Choice

A broad-based carbon tax may be preferred to a targeted carbon tax because:

A) it will raise more revenue for the government
B) it is more like a tradeable permit system, which works better for reducing pollution externalities
C) it leaves it to the market to determine where the economy can most efficiently reduce its emissions
D) it gives a smaller incentive to companies to reduce their emissions