Carbon pricing

A policy mechanism attaching a monetary cost to greenhouse-gas emissions, through taxes, tradable permits or related instruments. Coverage, credibility, enforcement, distribution and complementary policies influence its effect; a price signal alone does not remove every infrastructure or innovation barrier.

The monetary charge per unit emitted, for example currency per tonne of carbon dioxide. Multiplying by an activity's emissions intensity gives its direct carbon-cost increment per unit output. A common accounting basis must distinguish tonnes of carbon from tonnes of carbon dioxide.