Pricing carbon to achieve the Paris goals

Putting a price on carbon, based on the polluter pays principle, has the potential to be a powerful policy tool to reduce greenhouse gas emissions in the fight against climate change. A carbon price can come in the form of a tax or a cap and trade system. With a tax, the price of polluting stays constant, while a cap and trade system allows prices to fluctuate based on emissions.

Source: carbonmarketwatch.org